Research In Motion Prepares for Cold Winter

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The dread continues for besieged BlackBerry maker Research In Motion (Nasdaq: RIMM  ) .

The self-proclaimed "global leader in wireless innovation" reported gloomy earnings last night. Net income came in at $329 million, or $0.63 per share, dropping nearly 59% from last year's $797 million. Top-line revenue of $4.2 billion dropped by "only" 10% from the previous year, falling short of the $4.5 billion that Wall Street analysts were looking for. Meanwhile, gross margin took a big hit, falling to 38.7% from 44.5%. If you ask me, the only thing that RIM is leading is its own implosion.

The company shipped 200,000 PlayBooks and 10.6 million BlackBerry phones. The (already-reduced) estimates called for 562,000 PlayBooks and 11.8 million BlackBerry phones. The discouraging figures don't paint a pretty picture for the future of the company's QNX platform.

On the conference call with analysts, co-CEO Jim Balsillie even mentioned that RIM was planning on offering PlayBook price cuts to spur sales. RIM's overall shipments were short of the company's internal forecasts, which Balsillie attributed to "lower-than-expected demand for older models."

RIM is betting big on building its own platform from the ground up, while Apple (Nasdaq: AAPL  ) and Google (Nasdaq: GOOG  ) continue to snowball their respective network effects into thriving ecosystems.

For next quarter, RIM is expecting revenue between $5.3 billion and $5.6 billion and adjusted earnings per share in the range of $1.20 to $1.40, compared to the $5.3 billion and $1.36 analysts are modeling for.

The company really isn't heeding warning signs or addressing valid concerns expressed by employees and shareholders. It can't claim that it didn't get those respective letters since they were open letters. The company even publicly responded to an employee open letter, but has yet to make any meaningful change. Until then, RIM shareholders will need to brace themselves for a cold holiday season.

Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of Apple, Google, and Research In Motion. Motley Fool newsletter services have recommended buying shares of Apple and Google, as well as creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (6)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On September 17, 2011, at 7:13 AM, lucasmonger wrote:

    So what were to happen if google or apple were to acquire RIM. Under google, RIM would run Android on their blackberries and maintain compatibility with corporate blackberry servers while still able to run Android apps... Fairly compelling, except motorola might be the only brand that could also gain blackberry technology, I doubt Samsung or HTC would get the same treatment. Under Apple, RIM technology would be folded into the iPhone and every iPhone would be directly compatible with Blackberry Enterprise Servers. I like the Apple/RIM aquisition better.

  • Report this Comment On September 17, 2011, at 10:07 PM, ryanalexanderson wrote:

    I like Microsoft/RIM even more. Stick with the cash cow corporations who like secure communications. Neither rim nor Microsoft will ever have a cool consumer product, so they should stick together and keep sucking up to corporate IT.

  • Report this Comment On September 18, 2011, at 10:00 AM, MrPecuniam wrote:

    While RIMM might be failing in the consumer segment, in the buisness segment its the security of their platform that makes them wanted. They should cut their losses with their own version of the iPad and focus it to buisness. I do think that they are very undervalued atm.

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