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Even the Mayans could’ve seen this coming. BlackBerry maker RIM has seen its profits collapse this year, with the troubled phone company banking just £5.5m last quarter compared with £163m the year before.
The massive profit crumple was brought about in part by a fall in subscriber numbers, with RIM saying its user base now stands at 79 million, one million fewer than in the same period of the previous year. That’s the first fall in user numbers the company has ever seen, which is quite a feat given how ubiquitous smartphones have become over the last few years.
The raw revenue numbers are even worse. Rim’s total income for the quarter was $2.7billion, a huge 47 per cent down from the previous year’s takings. It’s not been a total disaster, though, as RIM now has $2.9bn in cash reserves, plus subscriber losses in the US have been partially offset by a rise in business in developing markets.
Plus, of course, the new BB10 hardware and software is going to be battling Windows Phone 8 for the smartphone race wooden spoon in a month’s time, which should see it attract at least a couple of hundred new users. [Telegraph]
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new BB10 hardware and software is going to be battling Windows Phone 8 for the smartphone race wooden spoon
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Bit early to be saying that, I guess we’ll see in a few years time. But I think Apple’s race to the bottom might surprise a few people.
So home many months until the liquidators go in?
It can’t be the subscriber numbers that are behind the fall in profit after all that’s just a 1.25% drop in users but nearly 97% drop in profits. Where those million customers each buying multiple gold and jewel encrusted blackberrys from RIM?
I was wondering this as well. Perhaps many of those 79m stalwarts are just hanging on to their old handsets rather than actually buying new Blackberries.
Financial statements dont make it terribly easy to see where the big gaps come from, but looking at theirs, they shipped 14.1mil handsets at this time last year and only 6.9mil this year. Their revenue is made up of approx 60% for hardware, 36% for service and 4% for software and other revenue this year. Hardware accounted for 79% last year, so thats a big chunk to lose for a company who relies so heavily on hardware. So they not only lost 1.25% of their customer base, but the existing customers bought a lot fewer handsets
On top of that, it looks like even though they made a lot less revenue, operating costs stayed much the same (R&D, marketing, admin etc)
http://www.rim.com/investors/documents/pdf/pressrelease/2012/Q3_press_release.pdf
http://press.rim.com/content/dam/rim/press/PDF/Financial/FY2013/Q3_FY2013_Press_Release.pdf
Track record for BlackBerrys at Carphone Warehouse, 47% of entire repair amount booked in by customers are BlackBerrys, 68% the handsets replaced by BlackBerry develop a secondary significant fault within the first 5 weeks. True story, have inventory list
RIM writing out a big cheque to Nokia doesn’t help their short term budgets either: http://www.theregister.co.uk/2012/12/21/nokia_rim_patent_licence_deal/
(probably helps in the long run as the cost for the legal battles would have been worse).
I think a lot of it can be attributed to a complete lack of innovation on their part. While their competitors are constantly trying to outdo each other, RIM have just stagnated and managed to stay afloat on the back of their corporate sales. The amount of average people with Blackberries these days definitely seems to have dropped. That’s not from any study or statistics, it’s just a general trend I’ve noticed. I could be wrong.
Ya definitely, innovation is the heart of their problem. We’ve been hearing promises of BB10 and the new phones to go with it for freaking ages. Now that we’re finally getting some leaks and previews coming out, its looking really bland and nothing special at all. I did think the design of the new phone Giz posted about the other day looked alright though
Their share price dropped a little over 22% today, a figure which should generally be reserved for seriously volatile companies, perhaps working in politically unstable countries, not one of the staples of the Western business world. It just goes to show how little confidence people have in the company’s future.
I still see a fair few blackberrys around (I have one as my work phone. bleh, its awful. buttons are so 2005), but even in the corporate world, they’re losing far too much ground and I see little chance of them regaining their former glory. I’d love to see another major player bringing interesting things to the table though
Oh yeah, I still see them. I’m just noticing a lot of people are making the switch to other brands. My boss recently changed over to iPhone, my mate decided he was fed up of BB’s just dying on him (third time unlucky!) so he went for a Galaxy SIII, both my sisters now sport the iPhone 5. It’s always sad to see a company die. I don’t want Blackberry to fade away. It’s not over for them yet. They just need a fairly drastic nudge in the right direction!