RIM Struggles to Get its Act Together

by Guest on September 19, 2011

Yesterday social media platforms like Facebook and Twitter were abuzz with complaints from BlackBerry users located in the US, Canada, South America and the Caribbean about sluggish messenger service. On the same day RIM admitted that their instant messaging service was facing some issues. In its tweet the company apologized for the inconvenience caused to users and assured them that the support teams were trying to resolve the problem at the earliest.

RIM has its very own network infrastructure that allows it to encrypt, condense and distribute data to BlackBerry phones through a cellular network. As the company tries to go beyond the corporate customer base and attract younger users from emerging markets, its instant messaging service, commonly known as BBM, has been one of its strongest selling points. Problems in the messenger service are not limited to the US, Canada and Latin America. According to a report in the Reuters, the service is unsteady at an international level. While messages are being delivered successfully from the US to Britain and Nigeria, it is not the case with those sent from Canada to Australia, the Middle East and India.

With the company already reeling under the effects of a disappointing Q2 earnings report, the problem further adds to its headaches. In Q1, the company shipped around 500,000 BlackBerry PlayBooks, but the sales took a steep downward turn with only 200,000 tablets being shipped in Q2. The BlackBerry maker announced a whopping 58% drop in its net earning, which were US$329 million for the 3 month duration ending on 31st August. The company’s revenues dropped by 15% to reach 4.2 billion. In comparison, in the second quarter of 2010, the company reported $4.62 billion revenue and profits worth $797 million. For the current year the company only expects to reach the lower margin of the already slashed year outlook.

The dismal report, which indicates that the company failed to meet the expectations of financial experts by a wide margin, caused panic in both New York and Toronto financial markets. RIM shares tumbled down by 19% on the NASDAQ and similar 20% drop was observed on the Toronto Stock Exchange. Most financial experts have now slashed their RIM share price targets.

In the midst of its disappointing Q2 performance, the company released BlackBerry 7. According to Mike Lazaridis, RIM co-chief executive and president, it was the biggest and the most successful launch in the firm’s history. But BlackBerry 7 seems like an unimpressive platform designed only to help the company transition to the QNX-based smart phones set to be launched in the first half of 2012.

Last month RIM launched a free of cost beta trail of BBM Music, its new cloud based service, in the US, UK and Canada with much fanfare. Lazaridis announced the company’s partnership with a number of leading organizations in the music industry to offer a great music discovery and sharing experience to its users. But with RIM shares taking a beating and the company struggling to keep up the quality of its services, the future of RIM seems uncertain.

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September 29, 2011 at 2:04 am

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5media September 19, 2011 at 7:22 am

RIM recently broke the bad news to its investors of suffering from a disappointing quarter. If the company’s smartphones sales weren’t disappointing enough, now the company’s tablet sales are also following a similar path http://tablettechtoday.com/blogposts/will-rim-follow-hp%E2%80%99s-price-move-for-playbook-tablet.html As for now, RIM is hoping that its tablet sales would pick up in a while. It’s also planning to update the software of the PlayBook to make it more competitive against the others.

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