Blackberry-maker RIM plans new focus amid $125m loss

 
The Blackberry Playbook RIM's Playbook has suffered from poor sales

Related Stories

Blackberry-maker Research in Motion (RIM) has said it plans to refocus its business back onto corporate customers.

The announcement came as RIM reported a quarterly loss, as revenues fell due to sharply lower smartphone sales.

The Canadian company made a net loss for the three months to 3 March of $125m (£78m), compared with a profit of $934m a year earlier.

It has lost ground as its traditional business clients have switched staff to iPhones or Android smartphones.

RIM also announced the resignation of former co-chief executive Jim Balsillie.

Chief technology officer David Yacht will also be standing down.

Shipments of Blackberry smartphones in the quarter fell to 11.1 million, down 21% from the previous three-month period.

It's been a disastrous couple of years for Research in Motion, the Canadian firm whose Blackberry device became the must-have gadget for ambitious professionals.

The arrival of Apple's iPhone and then Android phones using Google software left the Blackberry looking old-fashioned - profits suffered and the men at the top resigned.

Now, after unveiling another big loss, the new chief executive Thorsten Heins, has announced that the firm return to a focus on business customers.

The free BBM messenger service has made the Blackberry popular with teenagers - it was even blamed by some for helping co-ordinate riots in London last year.

But Thorsten Heins said the firm could not succeed if it tried to be everybody's darling, and would now return to its roots.

Shipments of the company's Playbook tablet hit 500,000, largely due to substantial discounting.

For the full financial year, the RIM made a net profit of $1.2bn, down from $3.4bn in the previous year.

The results were worse than analysts had expected and shares in the company fell as much as 9% in after-hours trading in New York. They have fallen by 80% over the past year.

Corporate focus

Once heralded as one of the fastest-growing companies in the world, RIM has struggled to keep up with rivals in the smartphone market, such as Apple's iPhone and handsets running on Google's Android operating system.

It has also struggled to gain a foothold in the tablet market.

"RIM has only sold 5% of the smartphones sold in the US in the past three months, Apple have 43%" said CNET analyst Larry Magid. "

"They may be doing well in some of the developing countries but clearly in the developed world they are not doing well, both Apple and Google are doing much better," he told BBC News.

Just three months after his appointment, chief executive Thorsten Heins said the company would now focus on its traditional core market of corporate customers rather than on individual consumers as part of a strategy to turn the business around.

"We plan to refocus on the enterprise business and capitalise on our leading position in this segment," he said.

"We believe that Blackberry cannot succeed if we tried to be everybody's darling and all things to all people. Therefore, we plan to build on our strength."

'Bread and butter'

Blackberry is popular amongst young people in the UK for its Messenger service and because it is cheaper than many of its smartphone rivals, which means they don't bring in serious revenue.

"Teenagers are not their main market. They don't want to spend money catering to that business.

"Their bread and butter is the big corporations, big government agencies who buy them by the thousands," Mr Magid said, explaining the reason behind the shift in focus.

RIM was keen to stress that it was not withdrawing from the individual consumer market entirely.

Blackberry will focus on the cheaper end of the consumer market, rather than trying to provide the kind of services offered by Apple's iPhone, the BBC's technology correspondent Rory Cellan-Jones says.

As well as increasing subscriber numbers, the company said it is also keen to increase the amount existing customers spend.

"We have new BlackBerry 7 devices scheduled to come out in the next few months to reinvigorate our position in the key entry-level smartphone segment, to support our efforts to continue growing our subscriber base by upgrading feature phone customers to smartphones," the company said in a statement.

The launch of Blackberry 10, expected later this year, and a much-delayed new operating system, are expected to be crucial to its turnaround plan.

 

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

Comments

This entry is now closed for comments

Jump to comments pagination
 
  • rate this
    +1

    Comment number 76.

    Richard Jackson is not alone - I have had a BB for over 5 years - the security is what makes it still th ephone of choice - young buyers are easily swayed and will never see the security advantages - BB will be back - IPhones are like Manchester - all hype and form - not much on function

  • rate this
    +1

    Comment number 75.

  • rate this
    +1

    Comment number 74.

    I've used the same phone for 6 years and refuse to update it. It still works and does the job it's designed for. I don't want a phone for video games or internet or music. Phones aren't exactly exciting things unless your sad and have to socialise 24/7. Which lets be honest applies to most people.

  • rate this
    +1

    Comment number 73.

    Blackberry is the best out there without the shadow of a doubt. Apple fanboys will always go one about their precious piece of rubbish aka iphone/pad without even having a look at Blackberry Tab/phones and mumble about absurd features. To all the doubters, RIM will rise with the advent of BlackBerry 10 the QNX based software which already powers the Playbook, try it before writing a platform off

  • rate this
    +9

    Comment number 72.

    @61 . Gibbsy123

    ''why would anyone want anything other than the ipad?''

    I'm afraid that 140 characters are not enough to list all the things I'd want before an ipad and none of them need batteries, well, almost none off them.

  • rate this
    -5

    Comment number 71.

    it's a higher price to pay for something that is inferior - it's all about value for money, not absolute cost....

  • rate this
    -5

    Comment number 70.

    TV-AS-Eyes - I think you need to read up on encryption, you dont seem to understand how it works. Its the end user companies ie the corporates that hold the encryption keys not RIM and that applies to any other company that does a similar service. Try & be accurate.

  • rate this
    0

    Comment number 69.

    A company with one USP that is no longer unique.

    They released an "iPad" killer that they had to discount to a fifth of it's original price.

    They had a good run but they're doomed, good solid technology inside bad or compromised products won't sell.

  • rate this
    +10

    Comment number 68.

    I must be the only one bucking the trend then. The fact Apple only give a 12 month guarantee whilst Blackberry in line with most other phone suppliers provide 24 months spoke volumes to me. My old 3GS needed replaced twice, and then had to pay extra for longer cover as I had no confidence in it lasting to the end of my contract. Took Apple off Co phone options because of this.

  • rate this
    +2

    Comment number 67.

    Yet more hysteria, biased reporting and mis-quoting. Apple & BB both provide different experiences. What's disappointing is the individuals who are sheep, Apple can do no wrong and you pay ridiculously high prices.Do your history, Apple almost went under and had to re-invent itself. They have a plan, let them execute and then all you experts can crow if they get it wrong.I suspect they wont.

  • rate this
    +1

    Comment number 66.

    If certain companies weren’t suing each other over designs and other irrelevancies, all the extremely talented designers & technicians that actually make/design these phones could work together and produce something of unparalleled quality. But no, let’s just keep churning out phone after phone trying to out-do the competition, adding yet more waste to this already hugely wasteful society.

  • rate this
    -1

    Comment number 65.

    The content is what sells to phones now. I couldn't imagine shifting away from an iPhone now having ploughed so much money into it through apps. Apple has by far the best selection and Android is catching up, but Blackberry trails way behind in what they can offer.

  • rate this
    +1

    Comment number 64.

    RIM deserves to go bankrupt (IMO) because they violated the trust of their clients; RIM gave in to demands by the UAE, India, and others, to make their encryption keys available to the respective Interior ministries.

  • Comment number 63.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    0

    Comment number 62.

    I got a ChavBerry - its not to shabby but I fear its mostly outdated now. Resets and crashes a few times, more than my commodore.

  • rate this
    -8

    Comment number 61.

    why would anyone want anything other than the ipad?

  • rate this
    0

    Comment number 60.

    I had always wanted to switch to a Blackberry but to be honest it is missing many of the features available through the other products on the market today. With people like myself using other applications such as Skype and voip it has been frustrating not being able to use them on the Blackberry. Plus you pay your provider internet access but you also have to pay for the RIM service on top.

  • rate this
    +3

    Comment number 59.

    Utterly the wrong descision - .

    - Fundamantally your hardware business is becoming irrelevant, and Playbook is a slow-motion disaster
    - Blackberry Enterprise Server/E-Mail/BBM/Infrastructure is where you excel
    - Dump hardware and deliver BES Clients for IOS, Android and Windows phone 7 - charge people £5 a month directly, cutting out the networks, for BES and you will rake it in

  • rate this
    -1

    Comment number 58.

    RIM are clueless. Mobile email and communication is ubiquitous but BB for some reason never got the memo. Instead of leading the revolution and adopting newer platforms they stuck to what is an absurdly expensive and complex piece of middleware. Consumerisation dictates what path the mobile market will tread. Turns out RIM didn't get that memo either.

  • rate this
    +3

    Comment number 57.

    Am I the only person in the world who finds the smartphone phenomenon deeply dull ? Everyone droning on about their apps, or arguing over whether Blackberry / iPhone / Android is better. Dull as dishwater !!

    Just me then ? Oh Ok :-)

 

Page 4 of 7

 

More Business stories

RSS

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.