RIM Suffers Losses, Delays the Next BlackBerry OS

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RIM Suffers Losses, Delays the Next BlackBerry OS

Canadian smartphone maker, Research In Motion Limited (RIM) (NASDAQ:RIMM) (TSE:RIM), is under mounting pressure as the company announced a worse than expected first quarter results on Thursday. The company generated a revenue of $2.8 billion with a net loss of $518 million. The turnover is down almost 33 percent from $4.2 billion revenue posted in the same quarter last year.

Share prices of RIM plunged 18 percent after the announcement, reducing its current market value to $4.1 billion. The stock has fallen 70 percent in the last one year.

Another blow, is the delay in release of BlackBerry 10 mobile device, as the development of new operating system is more time-consuming than anticipated. The company had earlier promised to release the device in Q1 of 2012, but now the release date has been postponed to early 2013. Blackberry 10 is the backbone of the company’s comeback plan.

“We’re not trying to be one of many,” said RIM’s CEO Thorsten Heins. “We are trying to be different. If I continue to rely on someone else’s OS and someone else’s platform, would that allow me in the long run to really differentiate?” Despite the disappointing results, Heins reiterated that RIM has a good future as a smartphone maker.

On the other hand, investors and analysts doubt over the future of RIM. Their opinion is that the company should seek a buyer before it sinks. “They either sell, break up the company or die,” said Matt Thornton, an analyst at Avian Securities LLC, Boston. “It is just a question of when.”

A viable option for the struggling BlackBerry maker is to launch its new line of products on the upcoming Microsoft Windows 8 platform instead of waiting for the development of BB 10 operating system. Microsoft Corporation (NASDAQ:MSFT) CEO Steve Ballmer has already approached RIM in the past few months to strike a deal. In this scenario, RIM may pursue Microsoft to acquire a stake in the Ontario-based firm and fund the company’s marketing operations.

The company has also announced to lay off 5000 employees this year as a part of its cost-cutting plans. It will bring down the total workforce from 16,500 to 11,500.

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