Is the new Blackberry a flop? Shares dive on first quarter results
Research in Motion shares fell 28% on Friday after the company reported it shipped far fewer new BlackBerry phones than analysts had expected in its fiscal first quarter.
The Blackberry Q10
As the Wall Street Journal put it, "Research In Motion executives won't say the company's new line of BlackBerrys is a flop, but some investors have already made up their mind."
Research In Motion shipped 2.7 million Z10 and Q10 phones last quarter, at the bottom of analysts' forecasts.
Chief Executive Thorsten Heins unveiled the new operating system, BlackBerry 10, earlier this year pinning the company's hopes on it . Investors believing in the turnaround plan, had sent RIM shares up 59% in the 12 months before Friday's news.
This was that RIM said shipped 2.7 million new smartphones in its latest quarter, a fraction of what Apple sold and about half the number sold by struggling Nokia .
Said the WSJ, "The disappointing numbers raise questions about whether RIM can gain steam in a market saturated by smartphones from Apple and Korea's Samsung ."
On Friday, CEO Heins said the launch was "still in its early stages," promising to increase spending over the next three quarters in rolling out new phones and services.
On Friday, shares went down to $10.46, erasing more than $2 billion in market value.
The Z10 phone received good reviews ahead of its February launch, and RIM initially said that device and a keyboard-equipped Q10 were selling well in many markets.
On Friday RIM said it shipped 6.8 million BlackBerrys in its first quarter, up from 6 million the previous quarter. But only 40% of those were Z10s or Q10s.
RIM said BlackBerry subscribers shrank four million to 72 million in the quarter. RIM is to no longer disclose subscriber numbers, said the WSJ, "dropping one of its most closely watched performance metrics."
The current fiscal year would be a "year of investment," Heins told investors on Friday's conference call.