RIM has been pushed around ever since Apple entered the mobile phone market, RIM has been losing customer to Apple, Samsung, Sony etc., who are performing well in the mobile market after the launch of Android OS.
The Canadian company posted results for its latest quarter that were worse than analysts had expected. It’s cutting 5,000 jobs and unexpectedly delaying the launch of its new phone operating system, BlackBerry 10, until after the holiday shopping season.
After several delays, the first phone with BlackBerry 10 was expected later this year. It will be delayed even longer, to the first quarter of next year, RIM CEO Thorsten Heins said.
RIM has hired a team of bankers to help it weigh its options as it loses market share and its business erodes. Heins said they continue to study those options, but he declined to elaborate and said the board would have to approve any changes.
RIM lost $518 million, or 99 cents a share, in its fiscal first quarter, which ended June 2. That compares with a profit of $695 million, or $1.33 per share, a year ago.
Colin Gillis, an analyst with BGC Financial, said the results and news of a BlackBerry 10 delay is far worse than the horrible news he had already expected. He said the worst quarters are still in front of RIM and management is not reducing expenses fast enough to compensate for the revenue decline. He expects this to be the last quarter that RIM will see subscriber growth and said he would not be surprised if RIM announces more layoffs by the end of the year.
“When a technology gets old, it’s not a slow fade. It’s a sharp cliff,” Gillis said. “There is very little market for old technology.”