RIM's Terrible, Horrible, No Good, Very Bad Month
Research In Motion has taken a lot of lumps in recent weeks, including tablet losses, lowered sales guidance, drunken executives, and an embarrassing snafu over a product name.
It's hard not to feel a little bit sorry for RIM these days. As if the company's slow product transition hasn't been enough of a weight around its neck, the company's had a bad month all around. Let's see what's giving RIM the holiday blues.
-- $485 Million Tablet Loss: Research In Motion recently revealed that it is going to take a charge of $485 million during the fourth quarter as it marks down the value of its huge stockpile of unsold PlayBooks. RIM sold only 150,000 PlayBooks in its most recent quarter, with a year-to-date total of about 900,000. Worse, the company has had to resort to deep discounts (as much as 60% for some models) to convince the public to buy them. The company is also giving away a free PlayBook for every two purchased by its enterprise customers. RIM's foray into the tablet market has been anything but successful.
More Mobility Insights
White PapersMore >>
-- PlayBook Hacked: Researchers recently released a tool that jailbreaks the PlayBook. While hackers have been faster to tunnel their way into other tablets, RIM's is the only tablet with FIPS certification for use by the federal government. RIM distributed a security patch, but that, too, was hacked. The jailbreak gives developers root access to the PlayBook's code.
[ No doubt, 2011 hasn't been kind to RIM. Will RIM Make It To 2013? ]
-- Weak Demand For BlackBerrys: RIM has revised its guidance for the quarter downward based on a faster-than-expected decline in sales of its older BlackBerry models. Though RIM's new BlackBerry 7-based handsets sold well at launch, demand for RIM's older devices has fallen off a cliff. RIM says that it moved 14.1 million BlackBerrys in its most recent quarter, and that lines up with its guidance, but the company's revenue won't meet predictions. RIM had previously said that revenue would be in the $5.3 to $5.6 billion range, but now says it will fall slightly under that number. RIM has issued revenue warnings for nearly every quarter of the year. The company won't get its next-generation BlackBerrys to the market until well into 2012, giving its competitors that much more time to eat into RIM's market share.
-- Drunken (Ex) Execs: On December 1, two RIM employees aboard a flight from Toronto to Beijing were arrested and later fired for drunken behavior on the flight. According to witnesses, the two men were argumentative with the flight staff, and were eventually restrained and handcuffed to their seats. The plane was turned around mid-flight to deposit the employees--who were arrested upon arrival--in Vancouver before continuing to China (the next day, after other passengers were forced to stay at Vancouver hotels for a night). The men were fined approximately $35,000 each and charged with mischief. RIM later fired the employees. "RIM does not condone behavior that conflicts with applicable laws and employees are expected to act, at all times, with integrity and respect," the company said in a statement.
-- Court Loss Over 'BBX' Name: On Tuesday, a New Mexico court ruled that RIM can't use the name BBX in reference to its next-generation BlackBerry smartphone platform. RIM revealed the new name at its DevCon event in October. Unfortunately, RIM forgot to do its homework. A New Mexico company called Basis International already owned the trademark rights for the BBX name. Worse, its trademark refers to software. The company sued, and Tuesday's ruling was a preliminary injunction blocking RIM from using the name. Rather than continue the fight, RIM gave up and has begun referring to BBX as BlackBerry 10. Score one for the little guy, I guess. BlackBerry 10 will now be the name for RIM's new smartphone and tablet operating system, which will blend components of the QNX PlayBook operating system and existing BlackBerry operating system.
Add to all these a bottomed-out stock price, shaken confidence in its leadership, and no end in sight to the onslaught from Apple, Google, Microsoft, and others, and it is easy to see that RIM is facing some of its darkest days.
For the 15th consecutive year, InformationWeek is conducting its U.S. IT Salary Survey. Upon completion of the survey, you will be eligible to enter a contest for prizes including a Bravia HDTV or iPad 2, and get a link to download our report once it is published. Take the survey now. Survey ends Jan. 20.