RIM reports plunge in income and delays to products
Beleaguered Blackberry maker RIM reported more bad news as the firm saw its net income sink by almost three quarters to just $265m in the third quarter of 2011.
The figure is a 71 per cent drop from the $911m it recorded in 3Q10, and was impacted in large part by a $485m pre-tax charge related to unsold PlayBook tablets.
The firm reported revenue of $5.17bn for the quarter, down $326m from the corresponding quarter in 2010, but a 24 per cent increase on the $4.17bn it saw in Q2 this year.
According to news wire reports, RIM’s co-CEOs also admitted that new devices that will run on its BlackBerry 10 operating system will be delayed until the “later part of 2012”, rather than the first quarter of the year, as was originally planned.
Co-CEO Mike Lazaridis said that the products will be delayed as the company wants to improve the battery life and the performance of its products before releasing them into the market. He explained that the chipsets that can enable this will not be available until mid 2012.
The news comes at the end of a forgettable 2011 for the Canadian firm, which was so bad that co-CEOs Lazaridis and Jim Balsillie announced that they will pay themselves salaries of just $1 each, as a gesture to investors.
The firm’s second quarter profits in 2011 slid to less than half of what it generated in the first quarter, and to a little over 40 per cent of what it made in the same quarter last year. In addition, a high profile outage in October saw millions of BlackBerry users around the world experience a service disruption, preventing them from using the browser or BBM messaging platform.
The firm also announced this year that it will lay off 2,000 staff as part of the cost-cutting programme and one shareholder, Jaguar Financial, a Canadian merchant bank that holds shares in the firm, has now twice called on the firm to begin a “value maximisation process”, which may include the sale of the firm.