Blackberry Maker Suffers a Flat Tire

The bad news for Blackberry maker Research in Motion (RIM) continues to roil the company’s bottom line as market watchers predict a poor fourth-quarter showing. Analysts are forecasting a fourth-quarter profit of 81 cents per share for RIM with a revenue of $4.54 billion.
These are disappointing numbers compared to reported profits of $1.78 per share last year on revenue of $5.56 billion.

Bad Business Decisions

RIM once was a global trailblazer in the smart phone market, but lately RIM has been bleeding market share to Apple’s iPhone and to Google’s Android operating systems found on Samsung phones. RIM is seeing its brand suffer from a confluence of bad business decisions and management changes at the top that are hurting its reputation. It’s reported that RIM’s international sales are falling. In addition, loyal customers of the Blackberry won’t see any new models of the phone for months. The Blackberry 10, loaded with RIM’s new operating system copied from the Playbook tablet computer, isn’t likely to be released until about the time that Santa Claus is loading his sleigh. This slowpoke marketing has stockholders fuming. Thestreet.com characterized the problems that RIM is experiencing as “a series of lame brained moves.”

Bad Future Plans?

In order to backstop its falling fortunes, RIM hired rookie Thorsten Heins to take over as the new chief executive. He replaced the ousted co-CEOs, Jim Balsillie and Mike Lazaridis, who were released by irate stockholders and given sack cloths to wander the management wilderness.

Much good fortune is expected from Heins as he takes the reins at RIM. Can he inflate the flat tires and get the RIM apparatus rolling again? Some people were flabbergasted after Heins announced that he didn’t think major changes were needed. Hopeful observers are looking to Heins to drive RIM out of the tangled woods by boosting the stock price and finding the yellow brick road via better strategy and marketing decisions.

Bad Future Forecast?

Tim Long, BMO Capital Markets analyst, said his crystal ball shows 82 cents per share for RIM and 11.5 million Blackberry smart phones shipped. In the same quarter in 2011, RIM shipped 14.9 million Blackberry smart phones. Long said that the cheaper Android smart phones are making inroads into some emerging markets where Blackberry once ruled the roost.

Research in Motion manufactures, markets and designs wireless devices for the mobile and telecommunications market. It sells devices for gathering and sending information, including instant messaging, e-mails, short message service, voice and intranet devices for Internet access and browsing. The company has its headquarters in Waterloo, Ontario, Canada. The Blackberry is one of RIM’s most well-known devices.

In 2009, Fortune Magazine named RIM as the fastest growing company in the world. It posted an 84 percent growth in profits over a three year period. RIM boasted a 10.4 percent share of the smart phone market in 2010. RIM experienced a major fiasco in October 2011 when tens of millions of users in North America, Europe, Africa and the Middle East couldn’t receive or send BBM messages and e-mails via their phones. The problem was traced to a faulty core switch.

George Stanzan is a contributing author for GetInsuranceQuotes.ca, click hereto visit and read more insurance articles.

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