Smartphones crush BlackBerry revenues

Sales of BlackBerry devices are crumbling and its new handset launch has been delayed. Where next for its creator, RIM?

by Elizabeth Anderson
Last Updated: 05 Feb 2013
Many analysts have predicted that the BlackBerry empire is fast crumbling, but the latest update was worse than even they expected. Research in Motion (RIM), the smartphone’s maker, reported a $518m (£334m) net loss in the three months to 2 June. That compares with a $695m profit the same time a year ago.

RIM’s sales are being not so much squeezed as pulped. Revenue in the first quarter dropped 43% to $2.8bn as sales of its BlackBerry devices fell sharply for a second straight quarter. The Canadian company announced it is cutting 5,000 jobs to reign in costs.

And sales are unlikely to pick up until early next year, when the new handset is released. The Blackberry 10, which is built around a new operating system and new silicon chips, was due to be released later this year but has been pushed back to 2013.  

When the BlackBerry burst onto the mobile scene more than 10 years ago, its mobile emailing function meant the phone was a must-have in the business world. The device dominated the smartphone market and in 2006 the neologism ‘CrackBerry’ was coined, in a nod to the phone’s addictive nature.

But over the last few years, the BlackBerry has steadily been losing ground to Apple’s iPhone and Google’s Android devices. Whilst Apple targeted consumers, RIM continued to market the BlackBerry as the phone for executives. Still the company lost out: the Android and Apple phones have around a 65% share in the corporate market now. The greatest sign of the company’s swift reversal in fortune is its share price. RIM’s stock is now worth around $9 – a 95% slump from its $148 peak in June 2008.

The new handset was seen as make-or-break for RIM. But with the launch pushed back even further and 5,000 (or 30%) of its workforce slashed, analysts and investors fear the worst.

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