BlackBerry maker Research In Motion Ltd (RIM) said Thursday that new phones deemed critical to the company’s future would be delayed until late next year.
Mike Lazaridis, one of the company’s co-chief executives, said the BlackBerry 10 phones would need a highly integrated chipset that would not be available until the middle of next year, so the company can now expect them to ship late in the year. He disclosed the delay on a conference call with analysts.
Analysts say RIM’s future depends on the new software platform. RIM needs to come up with a compelling BlackBerry as US users have moved on to flashier touchscreen phones, such as Apple’s iPhone and various competing models that run Google’s Android software.
Earlier on Thursday, RIM said BlackBerry sales would fall sharply in the holiday quarter, providing further evidence that it is struggling to compete. It also has been having a hard time finding a niche in the tablet-computer market, which is dominated by Apple’s iPad.
RIM continues to enjoy success overseas, but market researcher NPD Group says RIM’s market share of smartphones in the US has declined from 44 percent in 2009 to 10 percent this year.
The company’s stock fell 7 percent in extended trading on Thursday.
The delay in BlackBerry 10 phones is the latest in a series of setbacks for the once-iconic Canadian company. Its PlayBook tablet computer hasn’t been selling well, forcing the company to sell them at a deep discount. A widespread outage frustrated tens of millions of BlackBerry users in October. RIM fired two executives after their drunken rowdiness forced the diversion of an Air Canada flight. The head of its operations in Indonesia faces charges related to a stampede at a recent promotional sale where dozens of consumers were injured.
RIM said its net income sank 71 percent as revenue fell and the company took a large accounting charge on the PlayBook, which uses the same operating software that RIM’s new phones will use.
“We ask for your patience and confidence,” Lazaridis said.
RIM earned US$265 million, or US$0.51 per share, for its fiscal third quarter that ended on Nov. 26. That compares with US$911 million, or US$1.74 per share, a year ago. The company said revenue fell 6 percent to US$5.2 billion. The PlayBook charge was US$485 million before taxes.
The company shipped 14.1 million BlackBerry smartphones during the third quarter and 150,000 PlayBook tablets, but its fourth-quarter guidance was what investors focused on because it had warned about the third-quarter results earlier.
Although RIM has said it would sell fewer BlackBerrys in the current quarter, the forecast given on Thursday appeared worse than expected.
RIM said it would only ship between 11 million and 12 million BlackBerrys in the fourth quarter compared with 14.8 million in the previous fourth quarter.
RIM also said its fourth-quarter earnings would be in the range of US$0.80 to US$0.95 per share on revenue in the range of US$4.6 billion to US$4.9 billion. Analysts had been expecting earnings of US$1.15 a share on revenue of US$5.04 billion, according to FactSet.
Jim Balsillie, the other co-CEO, said he and Lazaridis have reduced their cash salary to US$1 per year, though they will continue to earn stock options and other compensation.
RIM’s stock fell US$1.15 to a new seven-year low of US$13.98 in extended trading on Thursday after the results were released.
The stock has lost about 75 percent of its value this year. A company that was worth more than US$70 billion a few years ago now has a market value of around US$8 billion.
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