Research in Motion's future is getting iffier each quarter as it signs on fewer new customers and has had to discount large numbers of BlackBerry smartphones and PlayBook tablets to clear inventory. The company revealed today that its revenue dropped 25 percent in the last fiscal quarter versus a year earlier, a decrease of $5.6 billion, with the decline in revenues accelerating after it launched its BlackBerry 7 smartphones in fall 2011 and had to deeply discount the poorly selling PlayBook tablet in the same period.
New CEO Thorsten Heins said he would reveal a major reorganization of RIM tomorrow and said the company would abandon most consumer markets and refocus on its historic area of strength, the business market it has largely tried to escape from through a series of unsuccessful efforts to transform the BlackBerry into a gaming or social device for young adults.
[ Get expert advice about planning and implementing your BYOD strategy with InfoWorld's 29-page "Mobile and BYOD Deep Dive" PDF special report. | Keep up on key mobile developments and insights with the Mobilize newsletter. ]
But Ovum analyst Jan Dawson says, "I'm not convinced that's best way forward.... I'm not sure Heins yet understands, or at least isn't able to articulate, that consumer appeal is key to future 'enterprise' success." That across-the-spectrum approach is what Apple used to make iOS the new platform for choice for business and what Android device makers like Samsung and Motorola Mobility are trying to do with Android.
In its presentation today to investors, RIM executives said they were willing to explore other business models, such as licensing all or some BlackBerry technologies to other companies. Some investors have suggested that RIM license or sell access to its secure messaging network or its BlackBerry Messenger instant messaging service.
Whatever it does differently in terms of getting revenues from its BlackBerry technology, the company intends to continue to make and sell BlackBerry devices. "It would be a big mistake for RIM to shut down the devices business, which drives the vast majority of revenues today," Dawson said, supporting RIM's decision to not abandon its device business as some investors have suggested it do.
RIM continues to express confidence that its forthcoming BlackBerry 10 OS -- expected to hit the market in the fall -- will reinvigorate the company's fortunes. But they warned investors to expect no turnaround before then, and in fact said they would no longer provide investors with guidance on financial performance, a sign of a troubled company.
In the meantime, RIM is trying to sell its unwanted BlackBerry devices in developing countries, in hopes they'll have more appeal and help create a new market for the future. However, Nokia is aggressively targeting those same countries with its Series 40 OS-based Asha devices and already commands the majority of the non-smartphone market in most of them. Samsung is also increasingly targeting such countries with a mix of Android and Bada smartphones, and Apple is aggressively targeted the growing middle and upper classes in those countries with its iPhone and iPad.
Sign up for CIO Asia eNewsletters.