BlackBerry maker to focus on business customers
March 30, 2012
First Published: 15:32 IST(30/3/2012)
Last Updated: 15:39 IST(30/3/2012)
Struggling BlackBerry maker Research in Motion Ltd. said Thursday that it plans to return its focus to its corporate customers after failing to compete with flashier, consumer-oriented phones such as Apple's iPhone and models that run Google's Android software.
A sign of Research in Motion (RIM) is seen at its headquarters in Waterloo, Ontario, January 22, 2012. Credit: Reuters/Geoff Robins
RIM said it will focus its consumer efforts on targeted offerings that tap the company's strengths. That includes devices that employees will want to buy on their own and bring to the corporate environment. The company was exploring partnerships and other opportunities for consumer products that aren't deemed central.
"We can't do everything ourselves, but we can do what we're good at," RIM CEO Thorsten Heins said.
RIM has had limited success trying to enter consumer markets in recent years, and Heins said a turnaround required "substantial change."
"We believe that BlackBerry cannot succeed if we tried to be everybody's darling and all things to all people," said Heins, who took over the company in January. "Therefore, we plan to build on our strength."
Also Thursday, RIM said former co-CEO Jim Balsillie has resigned from its board. David Yach, chief technology officer for software, and Jim Rowan, chief operating officer for global operations, also are leaving in a management shakeup.
The Canadian company has long dominated the corporate smartphone market, with its BlackBerrys known for their security and reliability as email devices. President Barack Obama even refused to part with his BlackBerry after he took office.
RIM has sought to expand its appeal to consumers, but it has had trouble because the phones aren't perceived to be as sexy as its chief competitors. RIM has been counting on improvements with its forthcoming BlackBerry 10 system, but that has faced multiple delays. BlackBerrys also lag iPhones or Android phones when it comes to running third-party applications.
For that reason, BlackBerrys are even losing ground in the business world, as employees demand iPhones or Android devices over BlackBerrys.
Apple sold 37 million iPhones in the last three months of 2011 â€” more than what RIM shipped in the past three quarters combined. RIM shipped 11.1 million BlackBerrys in the latest quarter, which ended March 3.
RIM also bombed in its efforts to produce a tablet computer to compete with Apple's iPad. Among other things, the PlayBook received negative reviews because it launched without an email program and the popular messaging service BlackBerry Messenger. In December, the tablets that originally cost $500 were selling for $200, below the cost of making them.
BGC Financial analyst Colin Gillis said it's a positive development that RIM is going to focus on its corporate clients and lower-end consumers.
"They are conceding the high-end consumer market with all these services that are wrapped around the platform," Gillis said. "At least there's some reality here. Are they going to compete against iTunes? No way."
RIM announced the changes as it announced quarterly results that fell short of Wall Street expectations.
Net loss was $125 million, or 24 cents a share, in the fiscal fourth quarter. This compares with $934 million, or $1.78 per share, a year ago.
After excluding one-time items, adjusted income was 80 cents per share, a penny short of expectations from analysts polled by FactSet.
Revenue fell 25 percent to $4.2 billion from $5.6 billion. Analysts were expecting $4.5 billion.
For the full fiscal year, RIM earned $1.2 billion, or $2.22 a share, on revenue of $18.4 billion. That compares with net income of $3.4 billion, or $6.34 a share, on revenue of
$19.9 billion in fiscal 2011.
In extended trading after the results came out, RIM shares fell 33 cents, or 2.4 percent, to $13.40. During the regular session, the stock increased 6 cents to close at $13.73.