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RIM hints at consumer exit as losses hit $125m

Simon Quicke

The state of the size of the challenge trying to compete in the smartphone market at Blackberry maker RIM was laid bare as the firm reported a $125m loss in its latest quarter.

RIM has been struggling for a while, with its move into the tablet market not going as well as it had hoped, but in its key smartphone market shipments were weak and revenues fell from $5.2bn to $4.2bn compared to a year earlier for the three months to 3 March.

At the same time as announcing a loss it also revealed that its chief technology officer David Yacht had decided to walk.

Blackberry smartphone shipments dropped by 21% on the previous quarter to 11.1m and the PlayBook tablet managed to shift 500,000 units, but discounting helped reach that figure.

The immediate response to the situation from the new CEO Thorsten Heins was to pull the drawbridge up on the consumer business and refocus on its corporate sales.


"We plan to refocus on the enterprise business and capitalise on our leading position in this segment," he said.

"We believe that BlackBerry cannot succeed if we tried to be everybody's darling and all things to all people. Therefore, we plan to build on our strength."

But that decision was seen as a mistake by leading analyst house IDC, which viewed a turning away from the consumer market as short-sighted.

"It clearly makes sense for RIM to re-focus its efforts on its core strengths, and on its enterprise customer base. But in our view, it would be a mistake for RIM to lose sight of the consumer market as a consequence of that re-focus," said John Delaney, research director, consumer mobile at IDC.

"Superficially, the idea of pulling back from consumer inorder to re-focus on enterprise might seem to make some sense. But once you start thinking at the next level down, you realise that the specifics of pulling back from the consumer market are highly problematic," he added.


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