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RIM’s Executive Fallout after 2012 Q4 Earnings Report

Radford C. Mar 29, 2012 1

Several high-level executives were ousted after the BlackBerry creator reported a quarterly loss thanks in part to sliding smartphone shipments and its poor-selling PlayBook tablet. Research In Motion (RIM) posted quarterly revenues of $4.2 billion, down 19% from the previous quarter, and down 25% from 2011’s Q4 earnings painting a pretty bleak portrait of the ailing company.  The Candian company also reported a net loss of $125 million which dilutes each share to $0.24 in Q4.

The company shipped 11.1 million BlackBerrys and more than 500,000 PlayBooks in the three months to March 3.

After the earnings report, a source close to CEO Thorsten Heins told The Globe And Mail that the top exec has just laid off a number RIM executives at the “senior vice-president and vice-president levels.”  Additionally, Former co-CEO Jim Balsillie has also announced that hey would be resigning from RIM’s board of directors.

Since the aftermath of the executive shakeup, analysts pointed to the company’s stagnant smartphone selection as a big reason for RIM’s substantial dip. Currently, RIM is working on their forthcoming BlackBerry 10 OS  and the hardware to accompany it behind closed doors. The latest OS is expected to make an appearance at this year’s BlackBerry Jam conference in May. As reported, consumer-ready handsets with BlackBerry 10 won’t be available “the latter part of 2012.”

Heins reported the following during the earnings call with investors and press (LTG listens):

“I have assessed many aspects of RIM’s business during my first 10 weeks as CEO. I have confirmed that the Company has substantial strengths that can be further leveraged to improve our financial performance, including RIM’s global network infrastructure, a strong enterprise offering and a large and growing base of more than 77 million subscribers. I’m very excited about the prospects for the BlackBerry 10 platform, which is on track for the latter part of calendar 2012. Notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant and I am taking the necessary steps to address them. In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM’s key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline. In parallel, we are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.”

Currently, iOS and Android devices continue to dominate the smartphone market in the United States with Windows Phone 7 is keeping a brisk pace hoping to take RIM’s distant third place in smartphone marketshare with the upcoming Nokia 900.

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