RIM today, in the midst of huge Google announcements and the European Championship, announced their first quarter earnings for the year of 2012. The corporation reported its first loss in a fiscal quarter since 2004, dropping 33% since the previous quarter. Its GAAP net loss in Q1 was $518 million with an adjusted net loss of $192 million or $0.99 and $0.37 per square diluted, respectively. In addition to losing profits, RIM cut 5,000 jobs today and even though that should make some sort of difference in loss next quarter, the company doesn’t expect it to.
To make matters worse, the one renowned BlackBerry manufacturer pushed its upcoming software release, BlackBerry 10, to the first calendar quarter of next year. This was going to be their comeback to the smartphone industry and had some very promising elements, yet the decisions made beforehand just weren’t in the company’s best interests.
How’d all this happen, you ask? It’s a long story, but The Wall Street Journal has published a lengthy report on the subject, citing a range of sources from Bank of America Securities analyst Brian Blair to the usual unnamed ones.
The bet long made by RIM was that both corporate and individual customers would continue to favor the BlackBerry’s easy-to-use mobile email over the multiplying features and apps on Apple Inc.’s iPhone and devices running on Google Inc.’s Android operating system.
Well, it’s too late now RIM. I suppose that was an understandable wager from some viewpoints, but you missed the swiftly-forming bigger picture. Your OS was too retro for the next generation and it either needed to be changed or moved out of the way completely. As for “ease-of-use,” iOS has, since its inception, scored the best in this category. People felt like it was a natural thing to use, unlike little scrolling wheels on your devices. Even their onboard keyboards were looked down upon as being unneeded.
At an investor meeting about a decade ago, analysts asked Mr. Lazaridis whether RIM was moving to a color screen, a feature popping up on devices in Asia. “Do I need to read my email in color?” he replied, according to Brian Blair, then an analyst with Banc of America Securities.
It would seem that RIM was just resistant to innovation. For a corporation named “Research in Motion,” I would have expected more. They were an innovator in their own time, but they didn’t move with the times. Even Microsoft, a company that didn’t have much of a market share in mobile devices, has a more daring attitude than you do. Being obstinate and pessimistic about stuff like this will never get you anywhere and it looks like you’re learning that lesson too late.
Mr. Balsillie asked if RIM should be worried about a new trend: consumers bringing their own smartphones to work and asking their employer to let them work on the devices. Some executives said the trend was a threat; a few said they weren’t worried. Mr. Balsillie went with the latter view, said a person close to the company.
It’s now clear that RIM has fallen into its most dire of paths. Is there a way out or is their demise imminent?