Research In Motion in its fiscal second quarter shipped 10.6 million BlackBerry smartphones, 200,000 PlayBook tablets, and saw its revenue drop 15%.

Eric Zeman, Contributor

September 15, 2011

3 Min Read

Research In Motion did not have a good quarter. Its revenue dropped 15% from $4.9 billion in the first quarter to $4.2 billion in the second, the company reported Thursday. Revenue was down 10% quarter-over-quarter. Its net income for the quarter was $329 million, compared with $695 million in the previous quarter. Earnings fell 59%, sequentially. In the year-ago quarter, RIM earned $797 million.

In terms of hardware, RIM said that it sold a meager 200,000 PlayBook tablets, which is less than half of the 490,000 expected by analysts. Year-to-date, RIM has shipped 750,000 PlayBooks. Worse, RIM shipped 10.6 million BlackBerrys, which is 1.3 million fewer than the 11.9 million expected.

"We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products. Overall unit shipments in the quarter were slightly below our forecast due to lower than expected demand for older models," said Jim Balsillie, Co-CEO at Research In Motion in a statement.

"We will continue to build on the success of the BlackBerry 7 launch to drive the business as we focus our development efforts on delivering the next generation, QNX-based mobile platform next year," he said.

RIM's guidance suggests the company really thinks things are going turn around during the next quarter. It believes it will bring in $5.3 billion to $5.6 billion in earnings, with a margin pegged at 37%. BlackBerry smartphone shipments are expected to be between 13.5 million and 14.5 million units. The company didn't predict how many tablets it would sell.

Clearly, the company is struggling. Its one-addicted smartphone users have fled in droves to competing platforms, such as Android and the iPhone. With Android sales booming and anticipation for the next iPhone 5 high, the new BlackBerry 7 models shipped too late in the quarter to have a material impact on its second quarter numbers.

Hopefully the sell-through to which Balsillie referred will actually happen and RIM will experience the rebound in hardware sales that it predicts. Given the lack of reliability coming from RIM's guidance of late, this will be a hard sell for investors who are growing impatient with the company's performance.

During its earnings call, RIM said that it is preparing PlayBook OS 2.0 for release after its DevCon event in October. RIM's leadership noted that the update will bring features that have been highly requested. The PlayBook lacks basic features such as email, contacts, and calendar management.

RIM also said that it is prepared to show off the first version of its QNX-based smartphone operating system. It said that QNX-based smartphones will follow "soon" after the software is demo'd. The company was a bit vague on the timeframe, however. Again, think DevCon in October. Previously, it had only committed to "2012" for its QNX smartphones.

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About the Author(s)

Eric Zeman


Eric is a freelance writer for InformationWeek specializing in mobile technologies.

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