BlackBerry Maker Posts $235M Loss, Glimpses Light Ahead

For BlackBerry maker RIM, things are, ever so slightly, looking up. Revenue was up slightly, it added subscribers during the quarter and BlackBerry 10 is on track.

BlackBerry maker Research In Motion is far from a comeback, particularly as competitors Apple and Samsung continue to grow their shares of the mobile smartphone market.

But on the bright side, RIM's fiscal 2013 second-quarter earnings call was far from the disaster of its first-quarter call, during which it had announced job cuts, a $518 million loss and the delay of the BlackBerry 10 platform, on which RIM's recovery depends.

During the quarter that ended Sept. 1, RIM grew its subscriber base by 2 million, for a total of approximately 80 million subscribers, largely thanks to growing interest from areas such as Asia-Pacific, South Africa and the Philippines, where CEO Thorsten Heins said RIM's popular BlackBerry Messenger app is "just kicking it—it's everywhere."

RIM’s revenue also nudged up 2 percent since the quarter before, to $2.9 billion, after shipping nearly 130,000 BlackBerry PlayBook tablets and 7.4 million BlackBerry smartphones—although this metric was down from 7.8 million phones the quarter before.

While an improvement on the previous quarter, RIM posted a net loss of $235 million.

"It is important that we grow or maintain our BlackBerry base and our revenue ... and while challenging, we have made progress in these areas," Heins told analysts during the call.

"The entire company is excited and energized for the new BlackBerry 10 phones," Heins added, though he sounded as tired as he looked delivering the keynote at the company's BlackBerry Jam Americas developer conference in California Sept. 25.

For the last three weeks, Heins and a team have been visiting carrier partners around the world, and soon he'll head off on another tour.

"It's actually been great to see people get so excited when they hold the new BlackBerry 10 smartphones in their hands ... and it's not just our carrier partners getting excited. Our enterprise customers are excited, too," Heins said.

RIM plans to release both touch screen and physical QWERTY BlackBerry 10 smartphones, which will feature HD displays and a browser with speeds unmatched even by desktops, he said.

"We fully understand that building BYOD [bring your own device] is about attracting the consumer," Heins said, adding that this is something he believes RIM will be able to do. With BlackBerry 10, RIM expects to not only retain its base but to "win back market share from competitors."

The early 2013 global launch of BlackBerry 10 is now a sure thing, RIM insists. However, another sure thing is revenue losses for its third quarter and another dip in device sales.

"We are approaching the holiday quarter, so the market will get even more challenging," Heins conceded. "We are expecting price pressure and that will work against [us]."

Heins also acknowledged that the company is considering licensing out BlackBerry 10 and other BlackBerry technologies. During a private interview in August, Heins told eWEEK that "it's prudent to look at all the options for the future," though decisions were being made independently of whether BlackBerry 10 is the hit RIM believes it will be.

"Companies I meet with understand that RIM remains a strong innovative and relevant company in the world," Heins said during the call.

Heins also clarified that RIM's Sept. 21 service loss—which affected users in Europe in Africa—wasn't an outage.

"We need to be very careful about the terms. That was not an outage. We had an issue with our service capabilities." While messages were delayed to approximately 4.6 million of RIM's 80 million subscribers, said Heins, no messages were lost.

On the call and in a statement, Heins insisted on what he needed to, for customers, investors and the company.

"Make no mistake about it," he said. "We understand that we have much work to do, but we are making the organizational changes to drive improvements across the company, our employees are committed and motivated, and BlackBerry 10 is on track to launch in the first calendar quarter of 2013."

 

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