Just one month before troubled Research In Motion (NASDAQ: RIMM) is set to debut its long-delayed Blackberry 10 operating system, the Canadian company reported a loss of one million subscribers during the fiscal third quarter. The drop to 79 million customers marks the first such loss in the company’s history.
Revenue was also down a full 47 percent for the quarter, just $2.7 billion compared to $5.2 billion in the same quarter a year ago. RIM posted a 2-cent-per-share profit of $9 million, compared to a $265 million loss—51 cents per share—a year ago. The income, however, included a $166 million favorable tax settlement and, therefore, the adjusted net earnings for the quarter actually resulted in a $114 million loss, or 22 cents per share—still better than the 35-cents-per-share loss Thomson Reuters analysts predicted for the company.
RIM shipped just 6.9 million BlackBerry phones and only 255,000 PlayBook tablets during the quarter. By comparison, Apple’s iPhone 5 is expected to sell between 35 and 47 million units in the next quarter. The launch of the Blackberry 10 OS has been called a last-ditch effort by RIM to regain market share from Apple and smartphones running Google’s Android operating system. RIM held less than 5 percent of the smartphone market in 2012, and according to IDC forecasts, it will own just 4 percent of the market by 2016.
“More than 150 carriers are currently completing technical acceptance programs for the first BlackBerry 10 products, and beta trials of BlackBerry Enterprise Service 10 are under way at more than 120 enterprises including 64 Fortune 500 companies,” RIM CEO Thorsten Heins said. “This is an exciting time and our carrier partners, application developers and employees are all looking forward to unveiling the innovation and excitement of BlackBerry 10 to our customers on 30 January 2013.”
On a conference call with industry analysts, Heins said he is considering lowering the price on existing BlackBerry 7 devices as well as carrier service fees in an effort to maintain current subscribers. The company also plans to increase its marketing budget in the next quarter in order to promote the BlackBerry 10 launch, scheduled for Jan. 30. RIM still projects a fourth-quarter loss, however, as customers put off purchases until Jan. 30 when BlackBerry 10 phones become available, and additional capital is spent on marketing the device.
RIM reported its earnings after the markets closed Dec. 20, and shares rose 6.7 percent to $15.07 in after-hours trading. By midday trading Dec. 21, however, shares had fallen more than 20 percent to $11.23.