Research in Motion is looking to bounce back after missing its revenue estimates four quarters in a row. RIM hopes to avoid another disappointment, as investors are hopeful that the new CEO’s plan of action begins to take hold. The share price hasn’t been investor friendly as it continues to decline every day. This is the first quarterly result under the new CEO, thus investors are hopeful that the “dramatically different” vow that he made in January will reverse the current sales slump that the company is facing. Most analysts have advised selling the stock in the short term as an investor cannot expect returns until RIM releases its new Blackberry 10 OS.
Last year before the new CEO took over, the BlackBerry 7 OS was struggling to keep up with other platforms like iOS and Android, which featured faster web browsing capabilities and larger screens. As a consequence, RIM lost more than 15% of its market share in a single quarter. Apple and Google on the other hand, benefitted from this slump as their combined share increased to 78%. The decline reached to such an extent that RIM’s own employees started carrying iPhones to the workplace instead of company issued BlackBerry devices.
There is still some hope for RIM as the rising sales in Latin America and the Gulf countries are expected to compensate for the sales slump in North America. Even though RIM posted an increase in the number of units shipped worldwide, its share dropped from 14% to 8.2%. On the other hand Apple’s share rose from 16% to 24%. Heins said that he will soon hire a new marketing chief in order to promote the new BlackBerry OS among consumers. There are also rumours which point towards Heins holding talks with computer and handset vendors to license the new BlackBerry 10. Heins further added that RIM’s number one priority is to get the new handset into the hands of consumers eagerly waiting for a change.
In order to ensure the removal of bugs and test the OS as a whole, RIM is expected to release a software prototype this May which will be distributed to developers attending the conference. RIM needs to sort out its issues quite fast because revenues are already dropping through the floor. Revenue has already fallen from $5.6 billion to $4.2 billion, even though the forecasts had predicted $4.5 billion. RIM stocks fell 2.4% on extended trading after the latest earnings report was released.