UPDATED: Research in Motion announced its fiscal third quarter results on Thursday (PDF), showing quarterly growth in revenues and handset sales, but continued dismal tablet numbers. As Apple, Amazon and others are on track to sell millions of tablets this quarter, RIM says it shipped only 150,000 PlayBooks in the past three months; note that shipped doesn’t equal sold. The results followed a provision from two weeks ago when RIM said it would take a $485 million pre-tax charge related to its PlayBook inventory.
Aside from continued bad tablet news, RIM suggests that its business is rosy:
- Revenue of $5.2 billion, up 24 percent from last quarter ending Nov. 26
- BlackBerry smartphone shipments of 14.1 million, up 33 percent from last quarter
- Subscribers up 35 percent year-over-year to almost 75 million
But the future continues to look murky as the company’s guidance suggests that revenues and smartphone shipments will be lower in the next quarter, which includes the holiday period. RIM figures revenues between $4.6-$4.9 billion with smartphone shipments of 11 to 12 million handets.
The company says that 79 percent of its revenue this quarter came from hardware sales; not services and software. If you’re not growing the segment that makes up the bulk of your revenue stream, I’d say there’s a problem; especially when iOS and Android hardware is selling like hotcakes. The PlayBook could have helped, but if anything has made things worse due to negative publicity for an unfinished product that isn’t selling well in what’s considered one of the hottest market segments.
At this point, the March results next year could be a make or break time for RIM. By then, we’ll know a few things: will be BlackBerry 10 be enough to help sell more BlackBerry handsets when it arrives around mid-year; if RIM delivers its PlayBook software update in time; and if so, can it turn a tablet loser into a competitor.
UPDATE: RIM said its BlackBerry 10 phones will not be available until the second half of 2012 because it is waiting on the availability of dual-core LTE chipsets that will power their new phones. This is just going to prolong RIM’s turnaround. Sales of BlackBerry 7 devices are going to continue to drop off as people anticipate the next generation phones from RIM. But the longer it takes the company to put out those BB10 phones, the more it risks slumping unit sales and shrinking market share.
RIM said it hoped to launch a big advertising blitz in 2012 to help drive sales. And co-CEO Jim Balsillie said he and fellow CEO Mike Lazaridis would reduce their salary to $1 a year. These are nice gestures and plans but the real issue is that RIM is not moving fast enough in a market that is zooming by. By the second half of 2012, RIM will be facing an even more advanced iPhone and a slew of Android phones even more more formidable than the Galaxy Nexus. And Microsoft and Nokia are going to be cranking up their efforts to make Windows Phone 7 a credible third horse in this race.