“RIM Profit Falls Below Estimates”

Research in Motion, also known as RIM, was the company who invented the smartphone, which was the Blackberry. RIM is a member of an oligopoly with a couple other familiar firms such as Apple, creators of the iPhone, and Google, the creators of Android. Due to the fact, there is an extreme amount of competition between these firms, RIM has not been doing as well as they expected, especially in the past few months. In the last 7 weeks, analysts had reduced the profit predictions, but when the results of earnings were turned in, they were lower than the analysts had hoped.

Companies in this market are always trying to come out with the new hot item, and Apple beat RIM to it. The Apple iPad, which was released this year, sold over 3.27 million in the first quarter. RIM has now released the Blackberry Playbook, but judging by the results, it is no comparison to the iPad. Although it exceeded the analyst’s expectations of 366,000, it only managed to ship out 500,000 Playbooks. Unfortunately, not too many people were pleased with the Playbook, because it had multiple software issues, which users felt could have been taken care of before the product was put onto market. Unlike the other RIM merchandise, the Playbook was the only item to exceed RIM’s expectations.

The first quarter, which ended May 28^th, was not as successful as RIM hoped. Compared to last year’s results at this time, profits fell 74 million dollars, while there was an increase in revenue from 4.24 billion to 4.9 billion. As a result RIM’s shares fell by 14 percent. Due to this decrease in profit, RIM is planning on cutting jobs, which would lead to a decrease in labor.

RIM has yet to release a new phone, although RIM claims that they have made a major upgrade, which will help them out of this downward spiral. Unfortunately, with the new products on the market between Apple and Android, brand loyalty comes into question, with all of these other options, people do not want to wait around for a new product from RIM, when one is already available by the it’s competitors. Luckily RIM is having luck with international sales, the international revenue rose by 67 percent compared to last years results.

Unfortunately RIM is not doing as well as hoped, but they are confident in this new product, that has no been released. It would be to their best interest to make this product as flaw-free as possible, unlike Playbook. Also focusing on their international sales would be a smart idea, especially since overseas markets are growing, there would be a higher demand for smartphones. Luckily their company has not reached the shut down point, but it’s time for a new product from RIM, or people will choose other options.

http://www.nytimes.com/2011/06/17/technology/17rimm.html?ref=business