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Blackberry maker Research In Motion – believed to be sitting on a $1 billion inventory mountain of unsold Blackberry smartphones – has forecast a hefty loss for its first financial quarter and reported that it has hired bankers J.P. Morgan and RBC Capital for “strategic advice” and is looking at “strategic business-model alternatives” – widely interpreted as meaning the company is looking for a potential buyer.”All you have to do is look at the bankers (Morgan and RBC),” blogged CNet’s Roger Cheng, forecasting that “a year from now, RIM may not exist”.
“When a company hires bankers to explore strategic options, it’s corporate-speak for looking at a sale. The company could either be swallowed up by another technology giant, or have its assets diced up and sold like slices of pizza,” he wrote.
RIM CEO Thorsten Heins yesterday issued a “business update”, in which he confirmed the company will post an operating loss in the first quarter, ending June 2, but not at this stage detailing its size.
He also forecast “significant” reductions in staffing and spending, but again did not specify numbers. One report estimated likely layoffs of around 2000 staff.
“The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this,” said Heins.
Heins reiterated his warning that the next few quarters will be difficult as the company works to get its business back on track. He held out hope that the new BlackBerry 10 platform will spark renewed interest in the company and its products.
While RIM has experienced five straight quarters of sales shortfalls – and Bloomberg estimates that it is sitting on a $1 billion mountain of unsold Blackberries, not counting more supplies held in the warehouses of carriers and retailers – Heins said its subscriber base has increased to 78 million, largely driven by lower end international markets.
Its BlackBerry Messenger service grew to 59 million users, and RIM now offers more than 80,000 apps, a 220 percent increase from a year ago.
