BlackBerry 7 vital to RIM turnaround

Michael Carroll
20 Sep 2011

A slump of almost 60% in net income during its fiscal 2Q12 means RIM must accelerate rollout of new devices, Ovum analyst Adam Leach warns.

The Canadian vendor saw net income plummet from $797 million in fiscal 2Q11 – covering the three months to end-August – to $329 million this year. Revenue fell from $4.6 billion to $4.2 billion on the back of a 12% decline in smartphone shipments to 10.6 million.

Jim Balsillie, co-CEO of RIM, notes that fiscal 2Q shipments were below par “due to lower than expected demand for older models,” but notes that new models running the firm’s latest BlackBerry 7 operating system generated strong demand. However, that demand wasn’t translated into shipments because the products were introduced late in the quarter.

It is that impact that Leach argues RIM must now address if it is to maintain any sort of competitive presence in the global smartphone market.

“This quarter’s results were based on RIM's existing range of Blackberry smartphones, which has been in market for some time, and it’s clear that the company needed to bring new models to market,” he says.

While the analyst firm predicts the new range of smartphones will boost shipments in fiscal 3Q, Leach says the firm “now needs to focus its attention on its next portfolio refresh and ensure a smooth transition to the QNX platform, which is used in the Blackberry PlayBook.”

RIM shipped 200,000 PlayBook tablets in fiscal 2Q11, compared to 500,000 in the previous quarter when the device was launched.

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