RIM Gets Dimmer: Layoffs, Q1 Loss Likely


Struggling BlackBerry maker Research In Motion warned investors Wednesday that its first-quarter financial results, to be announced June 28, likely will result in a loss. RIM continues to grapple with a shrinking U.S. subscriber base and increased competition from mobile giants Apple and Google.

The Waterloo, Ontario-based company also warned of potential spending and workforce reductions throughout the year and said it has on-boarded analysts from J.P. Morgan and RBC Capital Markets to start evaluating its financial options.

"These advisers have been tasked to help us with the strategic review we referenced on our year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives," RIM CEO Thorsten Heins said in a statement.

[Related: RIM To Offer Developers BlackBerry 10 Prototype]

As RIM continues to weigh its options, the company has revealed the exit of several top executives, including global sales head Patrick Spence and Chief Legal Officer Karima Bawa. During its fourth-quarter earnings call with analysts in March, RIM revealed the departures of CTO David Yach and COO Jim Rowan.

Despite a steady flow of resignations and the looming possibility of a major layoff, Heins said Wednesday that RIM will continue to hire employees as it readies the release of its new software platform, BlackBerry 10, slated to launch this year.

"While there will be significant spending reductions and head-count reductions in some areas throughout the remainder of the fiscal year, we will continue to spend and hire in key areas such as those associated with the launch of BlackBerry 10, and those tied to the growth of our application developer community," Heins said in the statement.

According to RIM, it has been making "steady progress" with BlackBerry 10, considered by many to be a make-or-break release. Heins touted a prototype device running on the new platform at RIM's annual BlackBerry World Conference earlier this month, revealing a number of new features, including touch-screen typing capabilities and a more sophisticated camera.

Heins also said Wednesday that RIM has committed itself to growing its app portfolio for the new OS -- a move that will prove especially critical to its success. The BlackBerry OS today hosts nearly 80,000 apps, he said, marking a year-over-year increase of 220 percent.

Google's Android OS and Apple's iOS have approximately 350,000 and 600,000 apps, respectively, according to mobile market researcher Mobilewalla.

Heins also noted that RIM’s global subscriber base has continued to grow this quarter to nearly 78 million, driven by strong sales of its BlackBerry 7 phones in India and Latin America. In the U.S., where RIM continues to see "high churn" among its subscribers, the company said it will continue to fight for their loyalty.

"We are continuing to be aggressive as we compete for our customers' business -- both enterprise and consumer -- around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base," Heins said.