While most companies still active in the smartphone business are thriving, Research In Motion (RIMM) seems to be the only one heading towards a meltdown. The company’s fourth quarter results have generated even a high executive change and chances are investors will push for more decisive measures down the line.
For RIMM fourth quarter brought results that are hinting towards a meltdown. It goes without saying that the BlackBerry producer is having a hard time trying to remain competitive in a dog eat dog world. The company’s smartphones have indeed become worldwide reputable, but as much as their specific design can be recognized by anyone who’s seen a RIMM commercial, the truth is these devices remained in the early days of the smartphone market technology.
Fourth quarter results showed a net loss of $125 million and a 19 percent revenue drop to $4.2 billion. The data caused RIMM shares to fall by 10 percent in after hours trading, but as the market got accustomed to the news the stocks recovered. During the press conference RIMM announced its poor fourth quarter results, the company also announced that Jim Balsillie, ex co-chief executive officer, has decided to resign from the board.
Analysts expected RIMM’s fourth quarter results to be bad. Jim Suva, analyst with Citigroup Inc., said: “The competitive landscape is getting more and more intense. We expect the outlook to be pretty bad”.
Michael Walkley, analyst with Canaccord Genuity, pinpoints one of the main issues of the BlackBerry and thus one of the causes behind the poor results as he emphasizes the difference between RIM and the competitors. “The iPhone, Android smartphones and new Windows smartphones have extended the feature and functionality gap”, while RIM’s BlackBerry’s remained in the age of standard smartphone technology.
Users these days would rather spend their money on smartphones that are highly performant, easy to work on, glamorous to brag about and above all compatible with most apps in the market. At the moment, BlackBerry remains from a user’s point of view a weird looking smartphone with not that many functions. Basically for the hype and young users, the BlackBerry remains something that grandma would choose in the age of touchscreen.
