Today we read and heard about RIM’s Q1 earnings for their 2013 fiscal year. While there is a lot of bad and ugly news, there was still a bit of relatively ok news. The worst news of all is that BlackBerry 10, the “Savior OS” that was going to bring RIM back into the fold but has been delayed until sometime in the first few months of 2013. We also heard that RIM’s revenue has taken an almost 40% hit compared to the previous quarter, and that shipped units has also dropped significantly. Lets take a closer look at what RIM reported out on today, and where this puts them in the general mobile market.
The other main point that needs to be looked at in terms of the financials of this press release is “GAAP net loss in Q1 of $518 million or $0.99 per share diluted; adjusted net loss of $192 million or $0.37 per share diluted”. This means that RIM did loss quite a bit of money and they are projecting that they will also loss more money in Q2 of this fiscal year. Now the one good thing here is that RIM does still have $2 billion or so in the bank. This means that we do not have to worry about RIM going under like Palm did, well at least until the day that RIM has burned through that cash in the bank. The loss of cash can be directly related to the fact that RIM only shipped 7.8 million smartphones and 260,000 tablets.
The shipped stats can be a little misleading as they do not mean “sold units”, rather RIM is merely stated how many units carriers and retailers ordered to hold as stock. These numbers are the lowest we have seen for RIM since approx. 2008, and obviously people are not buying their hardware. If we take a second and look at ones of the big dogs in mobile, Android, that platform is seeing 1 million activations daily. Yes that is daily folks, and that means that RIM has an enormous hill to climb to get anywhere close to where they used to be in terms of mobile market share.
Now the biggest bomb of today’s news……BlackBerry 10 has been delayed until Q1 of calendar year 2013!!! When I heard this I almost threw something at my laptop hoping that it would go through it and hit the RIM executives in the face (I don’t really want to hurt them, but SERIOUSLY!!!!!!!). RIM was able to get some pretty good hype for BlackBerry 10 at this years BlackBerry World and the BlackBerry 10 Jam events. People were even willing to wait until October, or around there, to see the awesomeness that RIM was working on. However now that we will not see a BlackBerry 10 device until sometime between January and March of 2013, I can assume that many BlackBerry users are now trying to decide whether they want to go iOS or Android.
RIM has truly shot themselves in the foot on this one. They have obviously not been doing well with BlackBerry 7 devices….they are down almost 40% in revenue this part quarter, and now they want people to continue buying and using them until next year. BlackBerry 7 does not have the staying power to gain RIM any more cash, they may get the slight bump in non-North American countries but the big game is in the US where Apple and Google rule.
Apple has just announced iOS6, and we will see a new iPhone in October-ish, and Google just announced Android 4.1 (Jelly Bean) yesterday. Hell even Microsoft will be releasing Windows Phone 8 sometime around October, and they don’t have the best track record of updates in the old WinMo days. In my opinion you especially don’t highlight that your app ecosystem is now up to 89,000 apps, when your big competitors are approaching or have surpassed the million app mark. In general the delay of BlackBerry 10 is definitely going to hurt RIM and I am worried that this delay means that RIM is officially going to leave the consumer market and merely stay in the enterprise.
Now I do agree that RIM should not release BlackBerry 10 before it is ready. This is the main point that Thorsten Heins made about the delay of the new platform during the call today. When you are a struggling mobile platform you definitely do not want to release a half-baked operating system, but at the same time how ling has RIM been working on this OS? They have owned QNX since April 2010 and we are now in 2012, so how long does RIM need to make the OS what they want? At this point I am very afraid that we maybe talking about RIM being acquired sometime in the near future. I am praying that this will not happen, but a little voice in my mind isn’t letting me completely believe that it won’t.
I hate being this negative towards RIM and BlackBerry. It was like the heavens has parted the first time I used my 8303e with its scroll wheel and awesome keyboard, but sadly the news from RIM today has pushed me into a downward spiral of anger and depression. I know that they can produce something amazing with BlackBerry 10, but they need to do it NOW and not in 9 more months. The other part of this news that saddens me is that I have some friends that work for RIM and I am now fearful that they will tell me they have lost their job in the near future. As a Canadian, I always felt a little proud every time I showed someone my latest and greatest BlackBerry, as I knew that it was something from my “hometown”, and this is why I truly hope that RIM can rebound from today and start the climb back up the hill.