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June 20, 2011

RIM 's Falling Revenue Leads To Job Cuts

On 18 August 2009, Fortune Magazine named RIM as the fastest growing company in the world with a growth of 84% in profits over three years despite the recession
BlackBerry maker Research in Motion (RIM) has said it is looking to slash jobs and streamline its operations as it struggles to regain ground in the smartphone market. The company's first quarter revenue fell short of expectations and it cut its outlook for future earnings for the second time this year

The BlackBerry and PlayBook maker grew 2012 fiscal first quarter revenues 16 per cent year-on-year to $4.9bn (£3bn) as profits slid nine per cent to $695m. But on a sequential basis the situation was markedly worse; sales fell 12 per cent and profits dived more than 25 per cents.

For the three month period ending in April, RIM's smartphone market share was 25.7%, down from 41.1% year on year, according to tech analyst comScore. The PlayBook debuted earlier this year to dismal reviews and complaints that it was rushed out before it was ready. But RIM sold 500,000 tablets in the first quarter, well ahead of Wall Street estimates.

New products would be delayed until the "very late part of August." The company is expecting revenues to decline further in the second quarter to between $4.2bn and $4.8bn. As a result of the dismal results, RIM will cut costs including a headcount reduction.Fiscal 2012 has gotten off to a challenging start," said RIM chief executive Jim Balsillie.Launches of the latest generation Bold device has been put on hold as have the upgraded Torch touchscreen mobile and touch handheld Storm, leading the vendor to slash Q2 shipment forecasts of 11 million to 12.5 million, down from the 14 million expected by market watchers.

Research in Motion Numbers Broken Down

Revenue: up 16% year-on-year to $4.91bn (but below the forecast RIM had given at the end of the last quarter).

Profits: down 9.6% year-on-year to $695m (below the forecast given last quarter).

Handset shipments: up 18% year-on-year to 13.2m.

PlayBook shipments: 500,000 in their first quarter (much better than the 336,000 analysts had expected. Note of course those are shipments, not actual sales).

source : Guardian

 According to Michael Mace " Five years ago, RIM was getting .7 new subscribers for every BlackBerry sold. In other words, most of its sales were to new users.

Today, RIM is getting .37 more subscribers per BlackBerry sold, and that figure is at an all-time low. To put it another way, RIM now has to sell more than two and a half devices to get one more subscriber.

Either RIM is selling most of its units to its installed base, or it is having to bring in a lot of new customers to replace those who are leaving for other devices.