‘The ongoing competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this and likely result in an operating loss for the quarter,’ admitted chief exec Thorsten Heins in an unexpected trading statement.
Not great news by any stretch of the imagination, but if that was all he had to worry about things wouldn’t be so bad. But his troubles are rather more numerous – for a start analysts are warning that RIM faces a potential $1bn writedown on unsold stock of handsets and tablets. That would be its third big stock writedown in as many quarters.
Then there’s the share price; back in the day RIM shares traded at $150, now they are down to about $10. Ouch. Heins – who joined in January and whose prospects hinge on a strategic review of the firm, which has been ravaged by competition from Apple and Android products – also announced that he has signed up a couple of i-banks to help.
JP Morgan and RBC Capital Markets are to examine the firm's financial options – which will probably amount to trying to raise some cash by licensing agreements and partnership deals. Meanwhile, Heins will be working out how many jobs will have to go as part of his turnaround efforts. An announcement on the subject of ‘headcount reduction’ is expected soon.
But despite all RIM's many and varied problems no mention was made of putting the firm up for sale or inviting bids. So Heins seems determined to have a go at getting the firm back on its feet. The $64,000 question is what will be left by the time he has managed it. Is the BlackBerry maker destined to become an also-ran in the smartphone business, or can it be a serious player again? We’ll have to wait and see…