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RIM releases its worst earnings report to date and Heins insists "nothing wrong with the company"
Six months after new CEO Thorstein Heins took the helm at RIM, he’s now looking a little loopy. In a radio interview with Canadian Broadcasting Corp Tuesday morning, Heins maintained that RIM is doing just fine.
“There’s nothing wrong with the company as it exists right now,” he insisted, adding: “I’m not talking about the company as I, kind of, took it over six months ago. I’m talking about the company [in the] state it’s in right now.”
In other words, while RIM was in a tailspin six months ago, it’s now back on track…despite the fact that Heins has done little if anything to actually change the company’s direction. In his first earnings call as CEO back in January, Heins made it clear that he plans to stick to RIM’s current strategy by keeping an integrated hardware and software solution. “I will not in any way split this up,” he insisted.
Last week, RIM shocked many with its horendous quarterly report - as in, it was worse than it normally is. Revenue was down 33% to $2.8 billion in Q1 from $4.2 billion the previous quarter and $4.9 billion in Q1 2012. RIM shipped 7.8 million Blackberry phones and only 260,000 Playbook tablets. The company announced its plans to ax 5,000 employees, and the nail in the coffin: its critical Blackberry 10 smartphones won’t be released until early next year.
Some might call this a death spiral. Not Thorstein Heins. “The company is not ignoring the world out there, nor is it in a death spiral,” he told CBC.
Maybe Canada and the U.S. have different meanings for the term “death spiral.”
RIM is still managing to hang on in the overall mobile subscriber market, but it’s slipping. In May, RIM claimed only 11.4% of the mobile market, while Android accounted for 50.9% and Apple took 31.9%, according to comScore. In February, RIM had 13.4%. By comparison, in May 2011, RIM had 24.7% of the market.
It’s going to be hard for RIM to make up for lost time when it releases BB10 in 2013. In the remaining months of 2012, customers are going to be hard-pressed to hang onto their old Blackberries when they can just pick up a new Android or iPhone.
Image source: i.i.com
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