Future looking Black for Research in Motion

Things haven't gone well for the BlackBerry manufacturer this year. Although judging by PlayBook sales, the outlook might not be completely bleak...

by Emma Haslett
Last Updated: 13 Oct 2011
It wasn’t long ago that Research In Motion practically had a monopoly on the smartphone market – but that was before the dawn of the iPhone: these days, things are looking decidedly bleaker for the BlackBerry maker. The Canadian company has just issued its second profit warning this year, after it missed first-quarter forecasts with a net profit of just $695m (£430m) in the three months to May 28, down from $769m during the same period last year. Its share of the smartphone market in the US also dropped, by almost 5% to just over a quarter during April.

Things went from bad to worse in May, when the company finally brought out its much-awaited PlayBook, to negative reviews from technology writers. Although, admittedly, they clearly weren’t banking on the loyalty of some of RIM’s customers, who nevertheless rushed out to buy the tablet, clocking up 500,000 sales in the first quarter, which smashed through expectations. Sadly, it didn’t quite repeat that performance when it came to its BlackBerry hand-held devices: it only shipped 13.2m of those, compared to forecasts of 13.6m.

So it’s inevitable that RIM has announced a cost-cutting programme, which it’s confirmed will affect jobs – although the company’s keeping schtum on exactly how many are expected to go. We’d be interested to know how far up the job-cuts will go. After all, the company does have two CEOs. During hard times, that seems a little excessive.  

But what went wrong? To begin with, problems with production in Japan as a result of the earthquake pushed back production of the PlayBook. But analysts also say that it’s partly to do with the software installed on RIM’s phones, which hasn’t really been updated for several years. So while rivals like Apple and Google have come up with whizzy interfaces, BlackBerry’s operating system is beginning to look creaky by comparison. It’s also an increasingly crowded market – and next to the sleek, shiny, relatively cheap smartphones everyone from Samsung to LG has released over the past few months, RIM’s phones are decidedly clunky.

Trying to put a brave face on things, RIM points to new product launches, like a new BlackBerry Bold that comes with a touchscreen as well as a physical keyboard, due to go on sale later this year. It also has its die-hard supporters who swear by their device. So it might yet pull a rabbit out of its hat.

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