Tools & Technologies

RIM Sinks 16%

Ouch. Research In Motion announced disappointing sales of its BlackBerry devices and suffered a 16% decline in its stock price:

Very disappointing sales of BlackBerry smartphones and tablets during the last quarter led RIM to cut its full-year profit expectations by 30%. The Waterloo, Ontario-based company also announced that it will begin a program to “streamline operations,” which will include layoffs.

RIM said its forthcoming operating system, BlackBerry OS 7, will enable a slew of sexy, high-end product launches across the globe that will get the company out of its current funk.

But the release of BB7 has been delayed until late August at the earliest. That means the majority of the company’s sales in the meantime have been — and will be for the near term — made up of cheaper, lower-end devices.

Scrutinized by analysts on a conference call Thursday afternoon, the company’s defensive co-CEOs said the delays are due to RIM’s carefully planned transition strategy.

Since March, RIM stock is down about 35% (see the chart on the CNN article).

My Comments
1. I’ve really enjoyed having a RIM BlackBerry device over the past many years, and have a generally positive view of the RIM Playbook. The winds of the market are changing, however, and RIM is struggling to stay relevant in the face of Apple and Android.

2. RIM has had problems before – think back to the patent litigation it went through 5 or so years ago. Many thought RIM would disappear as a result, but it didn’t. So there is historical evidence that RIM has pulled out of downward spirals before, but the dynamics around the Apple iPhone and iPad are very different this time.

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