RIM sheds over $1 billion in revenue as BlackBerry sales drop 20%

By Claire Reilly

BlackBerry sales over the past 3 months have plummeted, with the smartphone’s manufacturer Research in Motion (RIM) announcing a 21 per cent decline in shipments of the device from Q3 to Q4.

RIM released its fourth quarter results for the fiscal year ended 3 March 2012 yesterday, announcing that the company shipped a total of 11.1 million BlackBerry smartphones and a disappointing 500,000 BlackBerry PlayBook tablets over the 3 month period.

Mirroring the fall in product shipments, the company reported revenues of $4.2 billion for the fourth quarter of fiscal 2012, which represented a 19 per cent drop from third quarter revenues, and a 25 per cent decline year-on-year. Since the end of RIM’s 2011 fiscal year, the company has seen a $1.4 billion drop in revenues.

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The results no doubt come as a disappointment for RIM’s new President and CEO, Thorsten Heins, who was appointed just ten weeks ago. While Heins conceded the company faced significant challenges, he insisted that RIM was well placed to deal with them.

“The Company has substantial strengths that can be further leveraged to improve our financial performance,” said Heins. “Notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant and I am taking the necessary steps to address them.

“In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM’s key opportunities…we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline.

“In parallel, we are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.”

One of Heins’ predecessors, former Co-CEO Jim Balsillie, also announced his retirement following the results, after 20 years at the company.

Looking forward, the company said it expected “continued pressure on revenue and earnings” over the coming fiscal year.

“Due to a desire to focus on long term value creation and the current business environment, RIM will no longer provide specific quantitative guidance.

“Some of the factors contributing to this include, ongoing weakness in the Company’s U.S. smartphone business, an increased focus on selling BlackBerry 7 smartphones to grow the subscriber base in advance of the BlackBerry 10 launch, increasing competitive pressure in the Company’s international markets and the introduction of certain new lower tier service pricing initiatives and a higher mix of sales coming from entry level products.”

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