Unbelievably, there’s more bad news for the company behind the BlackBerry brand, Research In Motion (RIM). In a conference call with investors today, RIM announced that earnings during the third quarter fell 71%.
This will not be a surprise to any of our regular readers here at CP. We’ve been noticing for some time that as excitement for Apple IOS and Android products built, and the BlackBerry platform aged, less and less attention was being payed to BlackBerry products.
In September we reported that RIM was providing discounts on the BlackBerry Playbook tablet in an attempt to goose sales. Part of the reason that sales were going poorly is because the tablet was launched with an incomplete operating system. RIM promised to update it within 60 days . But then that date got pushed back, then pushed back again and again.
But RIM had an even bigger headache in the making. During the second week of October, the famous BlackBerry network had a major worldwide outage that lasted for days. The outage gave RIM a major black eye, damaged their reputation, and hurt the bottom line. RIM apologized with free apps and extended support contracts.
Just a week later, a study found that enterprise users, one of the BlackBerry’s major constituencies, were increasingly in favor of moving to other platforms.
While watching their market share being lost to Apple and Android devices, RIM also faced an inventory of Playbooks that just weren’t selling – and tablet pricing overall rapidly dropping. They had to slash the price of their tablets just to get them moving out the door.
There was some hope that RIM could turn things around soon. Early in 2012, they were expected to introduce a new line of smart phones featuring their new BlackBerry 10 operating system. The system was originally called BBX, but… in keeping with RIM’s troubled year, they were sued for trademark infringement and had to change the name. The new smart phones are expected to put the company in a position to more effectively compete against the Apple iPhone and Android smartphones.
But during the conference call, RIM announced there would be a delay in getting the new phones to market. They will be not be out until the middle 2012, according to Mike Lazaridis, co-chief executive of RIM. Though based on the way things have gone for RIM lately, that schedule may be optimistic.
Lazaridis and RIM’s other co-chief exective, Jim Balsillie, have said they are cutting their salaries to $1 per year due to the troubles that RIM has experienced under their management.