RIM’s shares tumble after profits fall
Research in Motion’s profits have fallen, prompting a share-price tumble and analyst concern for the company’s future.
Shares in the company plummeted 20% after RIM said it had shipped only 10.6 million BlackBerry phones and 200,000 Playbook tablets in the second quarter for an adjusted net income of $497 million, down from $797 million in Q2 last year.
The company tried to play down the significance of the results and talk up the potential for sales of its BlackBerry 7 series of phones, with CEO Jim Balsillie claiming: “We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products.”
It’s pretty clear the BlackBerry platform is now in decline RIM really needs QNX to reinvigorate the business
“Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models,” he added.
However, analysts are concerned that the company is losing its way and needs to start using the QNX operating system it bought last year or face being sidelined in a market under attack from Apple’s iPhone and Android handsets.
“It’s pretty clear the BlackBerry platform is now in decline,” analyst Tavis McCourt at Morgan Keegan told Reuters. “RIM really needs QNX to reinvigorate the business.”
RIM is hoping to get the QNX software that powers its PlayBook tablet onto smartphones next year in a move that could be critical to the company’s competitiveness.
“If QNX is a bust that’s when RIM needs to make strategic decisions as to whether it can go it alone,” McCourt said.