RIM Finances Sink As Unsold BlackBerries Pile Higher
RIM is sitting on over $1bn of unsold devices as CEO says restructuring will continue
Problems appear to be mounting at RIM as reports emerged that it faces a $1.03 billion (£661m) writedown after its stockpile of unsold devices grew by 18 percent in the last quarter.
The beleaguered BlackBerry manufacturer has also apparently brought in bankers JP Morgan and the Royal Bank of Canada to conduct a strategic review and suspended trading in its shares.
Grim for RIM
RIM has endured a number of difficult years and has recently witnessed a number of long-serving executives exit the company since Thorsten Heins assumed the role of CEO in January, replacing former co-CEOs Mike Lazaridis and Jim Balsille. In a business update, Heins confirmed that the restructuring would continue as RIM seeks to save $1 billion (£642m) by the end of the 2013 fiscal year.
“RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters,” said Heins. “The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter.”
“We are continuing to be aggressive as we compete for our customers’ business – both enterprise and consumer – around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base,” he added. “We will also continue to review RIM’s organisational structure and clearly define accountabilities for all key businesses and business processes with a goal of eliminating fragmentation, duplication and inefficiencies. “
Hope for the future
Reports earlier this week suggested that 2,000 people could lose their jobs as part of efforts to reduce RIM’s workforce to 10,000 early next year, with the news expected to be confirmed in especially poor quarterly results later this month.
Much of the company’s hopes for a revival rest on the launch of smartphones running the delayed BlackBerry 10 operating system, which it hopes will regain market share from the likes of Apple.
“While there will be significant spending reductions and headcount reductions in some areas throughout the remainder of the fiscal year, we will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10, and those tied to the growth of our application developer community,” said Heins.
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