BlackBerry maker RIM profit halves in second quarter

BlackBerry maker RIM profit halves in second quarter

BlackBerry manufacturer Research in Motion (RIM) saw profit before tax fall by half from US$904m (£571m) to US$414m (£261m) in the three months ending 27 August 2011. RIM earned $1,088m (£687m) in Q2 2010.

RIM co-CEO Jim Balsillie attributed the fall to a lack of demand for older BlackBerry models. The company launched its largest roll out ever comprising seven models in the latter part of Q2, but too late to make any impact on sales for the quarter.

Revenue for period was $4.1bn (£2.6bn), down 15% from $4.9bn (£3.1bn) in the previous quarter and down 10% from $4.6bn (£2.9bn) in Q2 2010. The revenue breakdown was approximately 73% for hardware, 24% for service and 3% for software and other revenue. Gross margin for Q2 was 38.7%, down from 43.9% the previous quarter and below the 44.5% achieved in Q2 2010.

During the quarter RIM shipped 10.6 million BlackBerry smartphones and approximately 200,000 BlackBerry PlayBook tablets.

The company said it expected results to pick up through the rest of the year. Revenue for the next quarter ending 26 November 2011 is expected to be in the range of $5.3-$5.6bn with a gross margin percentage of approximately 37%. BlackBerry smartphone shipments are expected to be between 13.5 million and 14.5 million.

Ovum analyst Adam Leach commented: 'This quarter’s results were based on RIM's existing range of BlackBerry smartphones, which has been in market for some time, and it’s clear that the company needed to bring new models to market.

'We expect RIM's new range of BlackBerry smartphones based on BlackBerry OS 7 to increase demand and shipment volumes for RIM in Q3.
'RIM now needs to focus its attention on its next portfolio refresh and ensure a smooth transition to the QNX platform, which is used in the BlackBerry PlayBook.'


Written by Mobile Today
Mobile Today


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