Research In Motion warns of weak BlackBerry sales; shares plunge

“Research In Motion Ltd. warned of slack sales for its BlackBerry smartphones in the current quarter, sending its shares plunging 11% in after-hours trading,” Ben Dummett and Roger Cheng report for The Wall Street Journal.

The warning, just a month after the company reported earnings and gave a weak short-term outlook, is fresh evidence that RIM is struggling to compete with Apple Inc. and other smartphone makers, especially in the U.S. market,” Dummett and Cheng report. “The revision comes after a lackluster debut of the company’s PlayBook tablet. The device went on sale earlier this month after delays and tepid reviews. But RIM said Thursday that early PlayBook sales were in line with its targets, which it didn’t disclose.”

Dummett and Cheng report, “The Canadian company’s shares fell $6.19 to $50.39 in after-hours trading. Before the news, the stock had gained 1.8% to $56.59 at 4 p.m. on the Nasdaq Stock Market. For the quarter ending in May, RIM said it now expects per-share earnings of $1.30 to $1.37, down from the $1.47 to $1.55 projected last month. RIM also said it expects shipments of BlackBerry phones for the quarter to be at the lower end of the range of 13.5 million to 14.5 million it forecast in March.”

Read more in the full article here.

MacDailyNews Take: As we wrote back on August 5th of last year: “RIM. Dead company walking.”

[Thanks to MacDailyNews Readers “Dan K.,” “Jay,” and “Dominick P.” for the heads up.]

25 Comments

  1. At least RIM take the integrated approach. Unlike HTC, Sony, Moto, and Sammy. I think Apples competition will come from HP/Palm after this Android thing peters out. If RIM can right their ship it could be number three.

    1. You’re quite correct. RIM was (past tense) Apple’s most dangerous competitor when iPhone first came out in 2007, because they controlled their whole device (software and hardware), one company with one well-established platform. That made RIM unpredictable, influential, and potentially fast moving.

      I think Apple (as a strategy) LET Android have free reign on Verizon for so long, until a few months ago, to have Android do most of the “dirty work” of marginalizing RIM on the largest wireless network. Apple focused on AT&T. Now that RIM is in a much weaker position (Android did a nice job), it was the right time for iPhone to invade Verizon and marginalize Android. Apple would much rather deal with the fragmented, predictable, and uncoordinated Android platform.

      HP controls the WebOS platform, but HP is essentially starting out at zero (not counting the minuscule number of Palm Pre in use). But Apple also started out at zero in 2007; Apple succeeded by being different from everyone else, NOT by copying whatever was successful at that time. To make a dent, HP must intentionally be different from Apple, not intentionally copy Apple. So far, I see copying…

      1. This was not Apple’s strategy at all. Apple needed to break the control of the carriers over the user experience. Verizon wouldn’t do it, AT&T eventually said yes, and the only reason AT&T said yes was due to the exclusive access to iPhone. Android wasn’t even on the scene when the iPhone came out. Don’t rewrite history to support your theories.

        1. It probably was not the strategy from the beginning (and definitely was not the reason Apple chose AT&T over Verizon). But once Android was “on the scene,” I think Apple waited as long as it did to get on Verizon in order to give Android enough time to help weaken RIM’s position sufficiently. Apple WANTED Android to become the the primary competing platform, not RIM’s BlackBerry, because Android is an uncoordinated malware-ridden mess. And that’s precisely the current situation; Android versus iPhone. That’s a scenario where Apple makes most of the available profit.

          And what happened to the original agreement of FIVE years exclusivity? Why did AT&T exclusivity just go away after 3.6 years? Why? Because it was all bogus; Apple probably could have offered a Verizon iPhone at any time after about two years (if it wanted to do so), which is when many of the other large worldwide markets went to multiple carriers. But instead, Apple waited until the perfect time to invade Verizon. RIM is struggling (thanks in large part to Android), and Android itself is a platform of struggling small players and Google, currently distracted by tablet computers.

          1. RIM was marginalized on Verizon as soon as Verizon started promoting its own line of DROID phones. If you notice, they stopped advertising the Blackberry Bold, at that time. The drop in marketing was all that was needed. Android didn’t have to do any dirty work to weaken RIM. Verizon undermined RIM by promoting their own brand, DROID. That’s where Verizon’s arrogance comes from in regard to mfrs. They know that what they promote sells. If they don’t promote you, you don’t sell.

          2. I have to add, Verizon was the one carrier that controlled the mfrs more than any other. They were known for having the best network with the lousiest handsets. They were known for crippling handsets so that users would have to pay for Verizon’s value-added services.

            Apple wouldn’t put up with that crap. Verizon wouldn’t give in to Apple’s demands, and so Verizon first promoted Blackberry, then later when it felt pressure to have an iPhone-like device, they promoted their Droid line. This helped Android; however, eventually Verizon saw that their level of smartphone penetration was not only lagging AT&T, but also Sprint and TMobile.

            They also saw that they had always had more subscribers in recent years than AT&T, and had boosted their lead by buying Alltel a couple years ago, but recently, AT&T had caught up through organic growth, thanks to the iPhone.

            So, slow subscriber growth allowing AT&T to catch up, and low smartphone penetration in comparison to the others, indicated to Verizon that their approach of ignoring the iPhone and promoting the Droid line was not working.

            The decision was not Apple’s. It takes two to tango, and as long as Verizon thought they didn’t need the iPhone to succeed in smartphones, they were not going to give in. That’s why it took 3 and a half years.

            1. Had AT&T known that Android and HTC and Motorola Droid phones were on the way, I seriously and highly doubt they would have signed on with Apple. AT&T knew as soon as the phone was described, that Apple as a partner was what they needed to break the strangle hold that Verizon had on the cellular market. You are correct, that Apple could have ended the exclusivity with AT&T any time they wanted, but the question was why? Apple was already struggling to meet demand and they had not yet completely rolled out the iPhone globally. There was 0 incentive on Apple part to end the AT&T agreement early. Plus, the dickhead Verizon president at the time, who was at loggerheads with Steve Jobs over the iPhone, said, “it was only a matter of time until Verizon had the iPhone, as Steve Jobs wouldn’t live forever”. Important to note, that Verizon didn’t have a chance of getting the iPhone while the old dickhead was in charge.

    2. I always said, If ANYONE could make a tablet to even compete with the iPad… it would be RIM.
      and they shot themselves in the foot with the playbook. WTF were they thinking… Rim needs to really turn themselves around before they become irrelevant, and they dont have much time left.. 1-2 years max.

      Android tablets will falter, i’ve played with a few… the hardware is not even decent, the OS… holy crap… and lets not talk about virii and malware..
      Once the lawsuits start coming to fruition, Google will have many many more problems. Already losing market share in the phone side, tablets never were a strong suit for google and never will be. I’d say another 2-3 years before Android is either gone from the market, due to lawsuits, or totally “redesigned” again due to the lawsuits. Oracle’s lawsuit i think will be a HUGE hit to Google.

      HP… i just dont see them being competitive. i’ll give them a long-shot chance with them having Palm to be a decent alternative to an iPad.

      MS….. sorry, bloatware and having to be plugged in to power every 2 hours… not going to catch on.
      Sorry, windows SUCKS when it comes to battery life. the tablets they make to compete with the iPad… will never have battery life worth a crap. unless they weigh 20 lbs…

      Someone was making fun of my MBP the other day… “Can’t even replace the battery” I asked them how often do you have to charge the battery, and replace yours? battery life of just over 2 hours. (can’t play a movie from DVD on a full battery charge) and has replaced the battery every year, had his laptop 2 years…
      Explained my MBP lasts 8-10 hours easy. plays at least 2+ DVD’s with zero problems with battery drain, and have not once had to replace the battery. Shut him up for a second… I just laugh at the thought on MS making a viable tablet.

      1. You are correct in your assumption on time for Rim. Every company that has RIM is currently reviewing their mobile strategy, and frankly, that means they are making plans to move to Android or iOS. I don’t see Nokia or HP even on the map for smartphones at this point.

    3. This Android thing is not going to peter out my friend.

      The OS is here to stay much to the anguish of MS and Apple.

      Even if Google said they were going to stop making Android tomorrow, any company or anyone for that matter could just pick up Android and keep going.

      What will peter out is the lawsuits over time.

  2. RIM is following in Palm’s footsteps. They invested too much in, and are placing all bets on, a new product (Playbook) that isn’t ready and won’t sell. RIM is destined to be bankrupt, acquired and out of business.

  3. Watching these companies is like watching people treading water in the ocean that know they can’t make it to shore or safety as the shark circles. We know it will not be pretty and we know how it is going to end. RIMM lost another limb and will be pulled under soon!

    Hello Dell and Microsoft, how is the water you are treading in? RIMM, Nokia and Palm are the appetizers and you are the main course for this Apple shark next meal.

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