RIM reports horrid earnings, delays BlackBerry 10 until early 2013

In an interesting juxtaposition, RIM, once a titan in the smartphone industry, released torrid earnings yesterday, just one day before the 5 year anniversary of the original iPhone launch.

In an interesting juxtaposition, RIM, once a titan in the smartphone industry, released torrid earnings yesterday, just one day before the 5 year anniversary of the original iPhone launch.

Given RIM's troubles as of late, and their inability to deliver a true competitor to the iPhone, analysts did not have high expectations for RIM's earnings results. Still, what RIM reported was much worse than anyone had envisioned.

Specifically, RIM reported a Q1 loss of $0.37 per share as the Canadian-based company saw revenue fall by an astounding 42%. Analysts were expecting a loss in the $0.03 range. And exacerbating RIM's already precarious situation was an announcement that the company will lay off 5,000 additional employees while also delaying the launch of its BlackBerry 10 OS which was initially slated for released in late 2012.

Regarding the delay, RIM CEO Thorsten Heins explained in a statement:

RIM’s development teams are relentlessly focused on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience.

Not a bad line of thinking, but this clearly falls under the purview of "too little too late." After all, new Android devices are being launched with swift consistency while Apple will by all accounts introduce the iPhone 5 sometime this Fall.

Naturally, investors weren't entirely thrilled with RIM's woeful news. Shares on Friday plummeted by as much as 20% during Friday trading before closing out the day at $7.39 a share. That share price represents a near 50% drop from were shares were trading just two months ago.

Losing money, letting go of employees, and delayed products don't mix well and RIM may be on its last legs.

And in a sobering assessment of the challenges that lie ahead, RIM said the following:

The Company expects the next several quarters to continue to be very challenging for its business based on the increasing competitive environment, lower handset volumes, potential financial and other impacts from the delay of BlackBerry 10.

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Copyright © 2012 IDG Communications, Inc.

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