Neil Hughes
Though RIM reported an operating loss of $308 million for its first quarter of fiscal 2013 on Thursday, the BlackBerry maker did manage to improve its cash balance from $2.1 billion last quarter to $2.2 billion this quarter. The growth in cash came from RIM collecting on its receivables, as its balance declined from $3.6 billion last quarter to $2.8 billion in the most recent three-month frame.
RIM's improved cash position is seen by analyst Shaw Wu with Sterne Agee as a key factor in the company surviving its current struggles. If RIM isn't careful with its cash balance, he said, the company risks facing bankruptcy.
"While it is painful for us to see layoffs, it is necssary for the company's survival," he said. "We believe a key risk is how much cash the company uses with its 5,000 in headcount reductions by the end of (fiscal year 2013)."
RIM announced in May that it will slash its workforce by 40 percent in the coming months to cut costs and try to turn the company around. Once a dominant player in the smartphone market, RIM has failed to respond to handsets like Apple's iPhone and devices running Google Android.
Challenges faced by RIM, as well as Nokia and HTC, are seen by analyst Brian White with Topeka Capital Markets as opportunities for Apple to continue to gain market share. With RIM's new BlackBerry 10 operating system delayed until the first quarter of calendar 2013, White wondered on Friday if the platform will ever be released.
"With the expected ramp of Apple's iPhone 5 and the Samsung Galaxy S III in the second half of the year, we believe RIM's delay of BlackBerry 10 may leave the company so vulnerable that the new platform may never see the light of day," White wrote in a note to investors. "Essentially, we would not be surprised if RIM is in a different form than today by the time (the first quarter of calendar 2013) rolls around."
If and when BlackBerry 10 does launch, analyst Charlie Wolf with Needham & Company said it needs to be "perceptibly superior" to Apple's iPhone and Google's Android platform if RIM hopes to turn its fortunes around.
"The existentialistic question is whether RIM indeed has a chance of reversing its downward spiral even with a superior platform," Wolf said. "With few exceptions, once started, downward spirals have often proved very difficult to reverse."
Christine McKee
Andrew Orr
Charles Martin
Marko Zivkovic
Wesley Hilliard
94 Comments
Toast. There's no coming back from this. Next up - Nokia.
RIM (Research In Motion = RSM (Research Stop Motion)
Too bad they were incredibly slow with the new smartphone standards and kept clinging to their old designs and models (for the most part at least). Even mobile internet in Holland is more expensive for Blackberry phones compared to any other smartphone out here.
http://www.neowin.net/news/rumor-microsoft-wants-alliance-with-rim
What key features are included in crack berry 10 ... That will lure the crack berry heads back
The conclusion of this article (bolded above) is complete BS and not even supported by the analysts and other related information quoted within the body of the article. Shaw Wu (arguably one of the worst and least likely to be right analysts), obliquely, implies that (maybe) one metric of their survival is how much cash they spend on the layoffs. The author then boldly interprets this as "if they hold on to enough cash they can make it to Blackberry 10"????
All other analysts disagree with Wu (and with the author) and these are even quoted within the body of the authors own article!
They will never make it to Blackberry 10 and even if they could, it's not enough to make the launch day. They have to survive until their new platform picks up speed and replaces all the lost sales of the old. They will have to make it for a couple of years, not just to the launch date.
The only reason Nokia has been able to pull of a similar magic trick to what the author implies here is that they had an outside injection of cash from Microsoft who is slowly taking them over. Balmer has already asked RIM for the same deal they gave Nokia and this morning RIM is all like, "well, maybe?" But if something like that happens then Blackberry's new platform is out with the mornings garbage anyway and RIM becomes another Windows phone maker.