RIM's U.S. Sales Plunged by 50% in Q2
BlackBerry maker Research In Motion (NAS: RIMM) saw its U.S. sales drop by half in the second quarter, the company said in a regulatory filing. The news underscores the depth of the company's smartphone plunge and the challenges it faces in its attempts to reclaim market share.
According to a filing with the Securities and Exchange Commission, RIM revenue from the U.S. fell by exactly 50 percent for the three months ending Aug. 27, down to $1.11 billion from $2.22 billion in the year-ago period. Overall, RIM's revenue for its most recent quarter clocked in at $4.2 billion, down 15 percent from the previous quarter and down 10 percent from the same quarter of last year. According to the filing, revenue from outside the U.S., Canada and the U.K. climbed to $2.33 billion, up 38 percent from around $1.69 billion in the year-ago period.
RIM's struggles in the U.S. have become more and more apparent over the past several quarters. According to the latest numbers from comScore, which tracks Americans' cell phone ownership, RIM's share of the U.S. smartphone market has sunk from around 40 percent to around 20 percent during the past 12 months. RIM has been buffeted by both Apple's (NAS: AAPL) iPhone growth and an ever-growing number of Google's (NAS: GOOG) Android phones. According to research firm NPD Group, 52 percent of all smartphones sold to U.S. consumers during the second quarter were Android phones, up 19 percent year-over-year. Apple's iOS grew 7 percent during the past year and followed in second at 29 percent market share. Meanwhile, BlackBerry continued to slide, falling to 11 percent market share.
RIM has been criticized for moving too slowly to launch its smartphones based on QNX software, which powers its PlayBook tablet. RIM recently updated its platform and handset lineup with BlackBerry 7, which features a refined, touch-friendly interface and Web browser. Further, the company has promised to release QNX-based smartphones next year -- QNX represents a ground-up overhaul of the aging BlackBerry OS. (Interestingly, RIM said during its latest earnings announcement that it will show off prototype QNX smartphones to developers during its developer conference Oct. 18-20.)
In other RIM news, DigiTimes reported that Taiwan's Quanta Computer has cut back production lines for the PlayBook "due to a large decrease in orders." RIM shipped approximately 200,000 BlackBerry PlayBook tablets in its most recent quarter, down from 500,000 PlayBooks in the quarter before that. Analysts had expected RIM to ship around 500,000 tablets in its second quarter.
RIM co-CEO Jim Balsillie acknowledged during the company's most recent earnings call that shipments were "lower than we had anticipated." But he said RIM is planning to release its PlayBook 2.0 software update sometime after the company's developer's conference in October, and that the upgrade would add native email, contacts and calendar functions to the device, as well as the Android app player and a movie watching service.
Perhaps more importantly, RIM executives promised to offer a PlayBook incentive program for businesses, as well as rebates and deals for existing BlackBerry customers, in an effort to reduce the price of the tablet. The executives did not say how much they would cut from the PlayBook's current selling price.
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