RIM posted revenue of $4.2-billion this quarter, down 10 percent from a year ago. From this $4.2 billion in revenue, the company made a profit of $329 million compared to the $797 million they made last year.
The reason for RIM’s steep decline in profit is two-fold: the company has gone nearly a year without new smartphone products, and the Playbook has been an abject failure.
RIM shipped 200,000 playbooks in Q2, just under half of the 490,000 units it expected to sell – a figure lowered in June from 2.4 million. In comparison Apple has reported selling 9.25 million iPad 2 units (actual sales as opposed to just shipping inventory like RIM).
Mike Lazaridis, RIM’s co-CEO, said in a Thursday conference call that the PlayBook shipments number “is well below where we’d like it to be,” chalking up the low figure to “market challenges”.
Lazaridis also said the new line of BlackBerrys, released in August, have seen strong sales, though he declined to provide exact figures.
RIM’s shares plummeted as much as 18% in after-hours trading, hitting a five-year low of $29.40. Some analysts suggest that the value of the stock will decline even further to $20 a share.
“Credibility sinks further as it’s apparent to us that visibility remains very low and investor risks remain elevated,” RBC Capital Markets financial analyst Mike Abramsky wrote in a report to clients on Thursday.
RIM claims it will generate revenue of between US$5.3-billion and US$5.6-billion for the third quarter of this year, which falls in line with expectations of some analysts.
Colin Gillis, a senior technology analyst at BGC Financial thinks the company has a long way to go in transforming itself back into the technological innovator it once was: “The issue is that the gap between RIM and other [major] smart phone platforms isn’t shrinking, it’s widening.”
“Apple sells more iPads in two days than RIM shipped all quarter.”