RIM stock tumbles. Can BlackBerry bounce back?
RIM stock fell today after a less than rosy earnings report.
It has already been labeled a RIM "death march" – a series of unexciting and relatively unpopular electronic devices, the looming prospect of layoffs, and pressure from competitors such as Apple and Android. And today, after RIM announced that quarterly earnings had failed to meet estimated goals, RIM stock tumbled as much as 16 percent, sending ripples across the tech world.
"Fiscal 2012 has gotten off to a challenging start," Jim Balsillie, Co-CEO at Research In Motion, said in a statement. "The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter." (According to Computerworld, RIM reps said in a conference call that a 4G version of the PlayBook tablet had been delayed.)
To be fair, BlackBerry will remain a major players in the smartphone market for years to come. But with other handset makers enjoying huge gains, the era of BlackBerry is fading faster than many expected. Balsillie predicted, however, that a spate of new products – and the "realignment" of cost structure at RIM – would soon lead to "strong profit growth." Well, maybe. But first RIM will have to haul itself out of the hole. (And no, that doesn't mean just releasing a series of slightly-but-not-really improved versions of the standard BlackBerry handset. We're looking at you, BlackBerry Bold 9900.)
As we reported last month, Android phones dominated the US market in the first quarter of 2011, besting both BlackBerry handsets and the Apple iPhone. According to the analytics firm ComScore, there are 72.5 million smartphones currently in use in the US, 34.7 of which ran on the Android operating system. Compare that to the only 27.1 percent of smartphones powered by the RIM operating system. Android, ascendent. RIM, well, not so much.