Research In Motion Ltd (BBRY) Revival Dims; CEO Ends Plan For PlayBook

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Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) disappointed many investors after reporting exceptionally weak results for its fiscal first quarter. The primary concern of investors is the volume of unit shipments. The company reported 6.8 million units lower than the 7.3 million estimate of analysts. It also reported a higher-than-expected decline in subscribers.

Research In Motion Ltd (BBRY) Revival Dims; CEO Ends Plan For PlayBook

Observers in the technology industry opined that BlackBerry / Research In Motion (NASDAQ:BBRY) (TSE:BB)’s chances of recovery are not good given the huge decline of its subscribers, and lower-than-anticipated shipments of its devices.

Based on the results, many conclude that consumers are not attracted to the new Blackberry 10 platform and its latest devices, thus it would be difficult for the Canadian smartphone manufacturer to maintain its customer base, and improve its profitability.

Research In Motion Ltd (BBRY)’s Stock Price Went Down

The stock price of Blackberry / Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) plummeted significant by more than 27 percent to $10.52 in the afternoon trading on Friday in New York.

RBC Capital Markets analysts, Mark Sue released positive convictions about the new BlackBerry 10 devices, and projected the company would eventually be profitable. However, he warned that its long-term prospect is blurry due to intense competition and diminished market presence.

In a related report, Market Watch quoted a comment from Sue that the company’s BlackBerry 10 products “should’ve resulted in better results.” He also speculated that Blackberry / Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) “could be discontinuing new and older products, which explains the decline in margins.”

Thorsten Heins Announcement For PlayBook

BlackBerry CEO, Thorsten Heins announced today that the company will no longer pursue its plans to implement the BlackBerry 10 operating system in its PlayBook tablet. According to him, the decision was difficult, but he explained that he was not satisfied with level of experience from the device. He emphasized the company would shift its resources to its core smartphone products.

Thorstein’s decision is not surprising because the PlayBook is a failed product given its small following. In addition, he already stated back in April that tablets alone are not a good business model. His previous statement already indicated that Blackberry / Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) would not build a BlackBerry 10 based tablet.

Meanwhile, Macquarie analyst Kevin Smithen downgraded his recommendation for the shares of Blackberry / Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) to underperform or sell rating. He compared the company to Palm, the failed smartphone maker. He is also doubts that the enterprise server business (BES) of the company will help boost its profitability.

Smithen wrote, “As such, the future is bleak for BlackBerry as an operating business, in our view. We are concerned that rising BlackBerry and channel inventories could cause a significant drawdown in cash over the next few quarters.”

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About the Author

Marie Cabural
Marie received her Bachelors Degree in Mass Communication from New Era University. She is a former news writer and program producer for Nation Broadcasting Corporation (NBC-DZAR 1026), a nationwide AM radio station. She was also involved in events management. Marie was also a former Young Ambassador of Goodwill during the 26th Ship for Southeast Asian Youth Program (SSEAYP). She loves to read, travel and take photographs. She considers gardening a therapy.

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