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A hand holding a BlackBerry phone
Image: picture-alliance/dpa

'Research in Slow Motion'?

May 30, 2012

The producer of BlackBerry phones, Research in Motion, has hired a group of bankers for a strategic company review. RIM says it's likely to report a disconcerting first-quarter operating loss.


Research in Motion (RIM), the Canadian firm behind the famed BlackBerry phones, confirmed on Wednesday that it had asked a number of bankers from Morgan Securities LLC and Capital Markets RBC to review its business model. The news came on the back of the company's announcement that it was expecting an alarmingly high operating loss for the first fiscal quarter ending in June.

"These advisors have been tasked to help us evaluate the relative merits and feasibility of various financial strategies," German-born RIM CEO Thorsten Heins said in a statement.

The company was not specific about the likely size of the loss. But in March alone, it posted a net loss of $125 million (100.3 million euros) after an inventory write-down for phones launched last year.

"That's a disaster, it's really bad," said Peter Misek, an analyst with Jefferies and Co. "We did not expect an operating loss this quickly."

Restructuring needed

Research in Motion invented the concept of on-your-hip email with its first generation of BlackBerry devices. But it now finds itself struggling badly on the smartphone market, trailing far behind Apple and other rivals such as Samsung which use Google's Android software.

RIM said the current situation was so bad that it also considered slashing its workforce by several thousand people by early next year.

The company's shares plummeted more than 75 percent over the past 12 months as BlackBerry phones suffered from a dearth of apps compared with those available for Apple and Android-based devices.

Nonetheless, RIM phones still retain a big selling point in their security features. That's something that will continue to make them attractive particularly for police, government officials and military leaders.

hg/mll (Reuters, dpa)

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