The stock is down 27% in early trading following the earnings release for the three months ending June 1 that had something to disappoint everybody. Despite the splashy and long-awaited rollout of the BlackBerry 10 platform, Research In Motion (still the formal name, although it’s doing business as BlackBerry) sold fewer phones than it did in the period last year — and pulled the plug on its PlayBook tablet. Earnings fell short of analyst forecasts. And the company warned that its losses will continue into the current quarter, frustrating analysts who had predicted a profit. In fiscal Q1 Blackberry had a net loss of $84M, an improvement from the $518M loss in the period last year, on revenues of $3.1B, +9.4%. Analysts expected the top line to hit $3.4B. The adjusted loss at 13 cents a share contrast with forecasts for a 5 cent profit. The company reports that it sold 6.8M smartphones in the quarter, down from 7.8M last year, and just 100,000 PlayBooks.
The company formerly known as Research In Motion says its product line is “re-designed, re-engineered, and re-invented” with the introduction today of the BlackBerry 10 operating system and two devices: the BlackBerry Z10 and Q10. The goal is to make it easy for users to switch between work and personal applications with separate home screens. The Z10 has a 4.2-inch, high-definition touchscreen, while the Q10 has a smaller screen and a physical keyboard. They’ll come with 16 GB of memory, and a slot for a memory card. The back opens, so users can replace the battery. The company says they offer simple ways to launch video chats with multiple applications open. A Screen Share application makes it possible for another user to take charge of the screen. Users can focus the camera via touch screen commands, and manipulate images with a built-in picture editor. The Story Maker application can create videos with music and images edited in. The company says it has more than 1,000 BlackBerry 10 apps including Skype, Amazon Kindle, SAP, Angry Birds, Facebook, Twitter, New York Times, Wall Street Journal, Reuters, and TuneIn. All of the major studios and music companies will offer content on BlackBerry World. The phones are expected to be available in the U.S. by March, and while carriers will determine pricing CEO Thorsten Heins said it likely will be $150 with a three-year contract. He says that musician Alicia Keys will serve as BlackBerry’s creative director. “I broke with you for something with a little more bling,” she said at the rollout event. “Now we’re exclusively dating again.” She says she’ll work with app designers and retailers, and people in entertainment and music, to help bridge the gap between a work phone and a play phone.
UPDATE, Friday, 6:45 AM: Looks like Research In Motion execs’ vague comments last night about their plans for the new Blackberry 10 system quashed investors’ initially warm feelings about the better-than-expected Q3 results. RIM’s stock price dropped nearly 17% shortly after the market opened on Friday. The company warned that it will increase its spending to promote the long-awaited update to the Blackberry platform in late January. CEO Thorsten Heins also said in a conference call that there’ll be new tiered service offerings, but offered no details. He told CNBC this morning that the transition to BlackBerry 10 “is going to be probably one-and-a-half to two years.”
BlackBerry maker Research In Motion (RIM) can use some encouraging news as it loses market share to Apple, Android, and Windows-powered smartphones, and today’s patent licensing deal with Microsoft seems to provide some. The software giant gave RIM the right to use its Extended File Allocation Table that the companies say will make it easier for some BlackBerry devices to transfer “large files for audiovisual media” and facilitate data exchanges between PCs and other devices. The system, called “exFAT,” enables flash memory devices to handle five times more data than they could under Microsoft’s previous “FAT” protocol. “Today’s smartphones and tablets require the capacity to display richer images and data than traditional cellular phones,” Microsoft’s GM of Intellectual Property Licensing David Kaefer says. “This agreement with RIM highlights how a modern file system, such as exFAT can help directly address the specific needs of customers in the mobile industry.” RIM shares popped more than 3% after the mid-day announcement, but retreated shortly afterward to about +2%.
I can just imagine the PR people at Research in Motion wincing today when CEO Thorsten Heins made this comment in an interview in Canada on CBC News’ Metro Morning. “There’s nothing wrong with the company as it exists …
You can see this from the 6.6% drop in Research in Motion’s stock price today — and the mostly hostile comments over at our sister site, BGR.com. Instead of giving a rebate to millions of people affected by last week’s switching problems, RIM said today that it will let them download a dozen premium games and apps that it values at more than $100, and have a month of free Technical Support. “We are grateful to our loyal BlackBerry customers for their patience,” co-CEO Mike Lazaridis said. “We have apologized to our customers and we will work tirelessly to restore their confidence. We are taking immediate and aggressive steps to help prevent something like this from happening again.”