Ailing BlackBerry maker to cut jobs, delay platform

BlackBerry maker Research in Motion offered up a grim quarterly report Thursday showing deepening losses and worsening sales, as it announced 5,000 job cuts and a delay in its new smartphone platform.

The struggling Canadian firm said its loss in the quarter ending June 2 widened to US$518 million. It delayed until early 2013 a new platform to help BlackBerry compete with Apple and other smartphone makers.

The report was worse than expected and sent RIM shares, already at a nine-year low, tumbling nearly 18 percent in after-hours trade to $7.44.

The company, which has been hammered in the rapidly changing market now dominated by makers of devices using Google's Android software and Apple's iPhone, said it would cut jobs to boost efficiency and save $1 billion in operating costs.

The move includes "a global workforce reduction of approximately 5,000 employees, which is expected to be completed by the end of fiscal 2013."

To make matters worse, the company said it was delaying its new BlackBerry 10 platform, which had been expected later this year in an effort to drive sales in the key holiday season.

The new platform is widely seen as the last chance for BlackBerry to regain traction in the marketplace.

"The successful launch of the BlackBerry 10 platform and the delivery of high quality, full-featured BlackBerry 10 smartphones remain the company's number one priority," a statement said.

But the development "has proven to be more time consuming than anticipated" and the new system launch was put off until the first quarter of 2013, it added.

"RIM's development teams are relentlessly focused on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready," said Thorsten Heins, who took over earlier this year as president and chief executive.

"I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience."

The company expects to incur restructuring related charges of $350 million by the end of fiscal 2013.

The figures for RIM's first fiscal quarter were dismal, highlighting its weakening position.

Revenues of $2.8 billion were down a whopping 33 percent from the prior quarter, and off 42 percent from a year earlier.

The company shipped 7.8 million BlackBerry phones in the quarter, down from 11.1 million in the prior quarter, and 260,000 tablets -- a drop of almost half.

The net loss of $518 million widened from the $125 million loss in the prior quarter and compared with a profit of $695 million a year ago.

Independent analyst Jeff Kagan said the report was "full of bad news."

"The numbers were bad. Worse than we hoped. And their next generation device which was expected this fall now won't be available until next year," Kagan said.

"Can RIM recover is the question we are now asking. They still have customers who love them, but they are simply losing business too quickly."

A survey by the research firm IDC showed smartphones powered by Google's Android software accounted for 59 percent of the global market in the first quarter of 2012, with 23 percent for Apple's iPhones.

That left just 6.4 percent for BlackBerry, compared with 13.6 percent a year ago.

In the US market, only around five percent of smartphone buyers opted for BlackBerry in the past three months, according to a Nielsen survey.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • BPI Family Savings extends auto loan promo
    BPI Family Savings extends auto loan promo

    BPI Family Savings Bank, the country’s leading consumer bank, is extending its newest campaign “Bagong Kotse, 1-Month Libre” promo untilJune 30, 2015 which allows you to avail of a car loan with a loan term of at least 36 months. The promo, which includes free 1-month free loan amortization, gives every customer an ease when […] The post BPI Family Savings extends auto loan promo appeared first on Carmudi Philippines. …

  • ‘Kentex owners still in Phl’
    ‘Kentex owners still in Phl’

    The daughter of one of the Kentex Manufacturing Corp. owners has assured the government that the businessmen are still in the Philippines, contrary to some reports that they have fled the country. Barbara Ang, daughter of Kentex shareholder Veato Ang, said her father and his business partners have no plans of leaving the country despite the razing of the Valenzuela slipper factory, which killed 72 workers on May 13. Valenzuela Mayor Rex Gatchalian also stood by his promise to punish any local …

  • Lawmakers to review building code provisions
    Lawmakers to review building code provisions

    Lawmakers are set to review provisions of the National Building Code and Republic Act 10121, or the Philippine Disaster Risk Reduction and Management Act, to strengthen contingencies and policies to prepare the country for possible major earthquakes. The move came following proposals from Reps. Winston Castelo of Quezon City and Lito Atienza of the Buhay party-list to review the two laws and other regulations during a hearing of the House committee on Metro Manila development on the …

  • Noy: Phl may attain first world status with continued reforms
    Noy: Phl may attain first world status with continued reforms

    The Philippines’ attaining first world status may soon be imminent if significant reforms initiated by the current administration would be consistently pursued, President Aquino suggested yesterday. “Kung madidiligan ang ating mga pinunla, at makaka-graduate ang mga pinag-aaral natin upang makapasok sa maaayos na trabaho, baka po tuluyan nang nasa first world status tayo sa panahong iyon (If we water the seeds sown and those we sent to school will find better jobs, then time will come that …

  • Phl won’t recognize China air restrictions
    Phl won’t recognize China air restrictions

    The Philippines will not recognize restrictions on air and sea travel set by China in the West Philippine Sea, President Aquino said yesterday. “We will still fly the routes that we fly based on international law and the various conventions, agreements that have been entered into through various decades,” Aquino told reporters in an ambush interview after inspecting the Marikina Elementary School in preparation for the opening of classes in June. But he expressed confidence that China would …

  • Rainy season likely in 2nd week of June
    Rainy season likely in 2nd week of June

    Filipinos may have to wait until the second or third week of June for rain, the Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA) said yesterday. Rene Paciente, chief of PAGASA’s marine meteorological services section, said they expect the rainy season to start in the second or third week of June. The criteria for declaring the onset of the rainy season include the prevalence of the southwest monsoon and the 25-millimeter rainfall recorded in at least five …

  • UN urged to probe torture cases under Noy’s term
    UN urged to probe torture cases under Noy’s term

    The United Nations has been asked to look into   110 cases of torture and numerous cases of illegal arrests during the Aquino administration. Cristina Palabay, Karapatan secretary-general, yesterday said the matter could be looked into when the United Nations Subcommittee on Prevention of Torture (SPT) visits from May 25 to June 3 to monitor the  implementation of the Optional protocol to the Convention Against Torture (OpCAT), which the Philippines ratified in 2012. “We enjoin the UN SPT to …

  • Filipina maid photographs "modern slavery" in Hong Kong

    By Emma Batha LONDON, May 26 (Thomson Reuters Foundation) - A Filipina maid in Hong Kong has published stark photographs of burned and beaten domestic workers to highlight the "modern slavery" she says has long been the city's shameful secret. "Hong Kong is a very modern, successful city but people treat their helpers like slaves," said Xyza Cruz Bacani, whose black and white portraits won her a scholarship from the Magnum Foundation to start studying at New York University this month. It's …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options