Story first appeared on USA Today
Research In Motion is no more.
RIM, the struggling Canadian phone maker that introduced the world to the notion of 24-hour work e-mail, hit the reset button on its identity and operation Wednesday by overhauling its product lineup and changing the name to its more commonly known brand, BlackBerry.
BlackBerry CEO Thorsten Heins took the stage in New York and revealed the BlackBerry 10 line, including a new mobile operating system and two new smartphones that are aimed at competing with Apple's iPhone and other high-end devices that run on the Android or Windows operating systems. BlackBerry Z10 is a 4.2-inch touch-screen smartphone, while Q10 comes with a physical keyboard that BlackBerry loyalists are reluctant to give up.
The new products are the result of a company resuscitation strategy undertaken by Heins, who was hired about a year ago, to ensure its viability. With bearish investors fearing that it may not survive, its stock has plummeted 74% since the beginning of 2011.
"We have definitely been on a journey of transformation," Heins said. "I know innovation is at the heart of RIM."
In changing its name to BlackBerry — a long overdue move, as most already associate RIM with the catchy brand name — the company will change its stock ticker symbol from "RIMM" to "BBRY" on Monday.
BlackBerry 10, which now becomes the fourth major mobile operating system in the U.S., has features that are familiar to users of Android and Apple's iOS, including icon tiles for apps.
But it also introduces an array of unique tools. BlackBerry Hub is the central interface for receiving all types of messages, including e-mail, Facebook updates and Twitter messages. BlackBerry Peek is a feature that allows users to swipe the screen to quickly check e-mail or social media while watching a video.
BlackBerry Balance lets businesses keep work data separate and secure from home data. BlackBerry Remember is a series of folders for managing content. BlackBerry Story Maker is for combining photos and video to create personalized films.
BlackBerry will have to hustle to catch up to competitors in content. BlackBerry World, its content store, currently hosts 70,000 apps vs. hundreds of thousands in both iOS and Android. The company pointed out that many popular apps are now available or coming soon, including Skype, MLB, Dropbox, Angry Birds Star Wars and Where's My Water?
Heins says all eight major studios and major music labels have signed on to add music and video to BlackBerry World.
"They delivered on the promises that Heins made," says Gartner analyst Michael Gartenberg. "There's more than enough here for consumers to be satisfied. They have to continue that momentum and overcome the perception that there might be an app missing."
Z10 will be available on three major U.S. wireless carriers — AT&T, Verizon Wireless and T-Mobile — starting next month.
Only Sprint has committed to selling the Q10 so far. BlackBerry said the model will be available in April. The decision to add a keyboard to Q10 — with a 3.1-inch AMOLED touch-screen display — was driven largely by consumer reaction. "We heard you loud and clear," Heins said. "We built this for all those people (who) said we just have to have a physical keyboarding experience."
To enhance its hip quotient, BlackBerry also named singer Alicia Keys as its global creative director. "We're exclusively dating again, and I'm very happy," she said.
Showing posts with label RIM. Show all posts
Showing posts with label RIM. Show all posts
Thursday, January 31, 2013
Tuesday, June 12, 2012
RIM on the Ropes
Story first appeared on NPR.
President Barack Obama couldn't bear to part with his BlackBerry. Oprah Winfrey declared it one of her "favorite things." It could be so addictive that it was nicknamed "the CrackBerry."
Then came a new generation of competing smartphones, and suddenly the BlackBerry, that game-changing breakthrough in personal connectedness, looks ancient.
There is even talk that the fate of Research In Motion, the company that fathered the BlackBerry in 1999, is no longer certain as its flagship property rapidly loses market share to flashier phones like Apple's iPhone and Google's Android-driven models.
With more than $2 billion in cash, bankruptcy for RIM seems highly unlikely in the near term, but these are troubling times for Waterloo, Ontario, the town of 100,000 that was transformed by the BlackBerry into Canada's Silicon Valley. RIM is Canada's most valuable technology company, an international icon so prestigious that the founder and its other driving force, are on an official government list of national heroes, alongside the likes of Alexander Graham Bell.
RIM's U.S. share of the smartphone market belly-flopped from 44 percent in 2009 to 10 percent in 2011 according to market researcher NPD Group. The company still has 78 million active subscribers across the globe, but last month RIM issued a warning that it will lose money for the second consecutive quarter, will lay off workers this year, and has hired a team of bankers to help it weigh its options. Last July it slashed 2,000 jobs.
Of RIM's 16,500 remaining employees, 7,500 live in Waterloo, a university town 90 minutes' drive from Toronto, where everyone seems to know someone who works for RIM.
The decline of the BlackBerry has come shockingly fast. Just five years ago, when the first iPhone came out, few thought it could threaten the BlackBerry. Now the Chief Executive says his employees are getting asked all the time, 'What's going on with you guys? What happened? I mean RIM is the star of Canada and what happened to you guys? And how bad is it going to go?'
RIM's software is still focused on email, and is less user-friendly and agile than iPhone or Android. Its attempt at touch screens was a flop, and it lacks the apps that power other smartphones. Its tablet, the PlayBook, registered just 500,000 sales to Apple's 11.8 million in the last quarter despite a price cut from $500 to $200, well below cost.
RIM's hopes now hang on BlackBerry 10, a new operating system set to debut later this year. It's thoroughly redesigned for the new multimedia, Internet browsing and apps experience that customers are now demanding.
The CEO, formerly RIM's chief operating officer, says he can turn things around with BlackBerry. He took over in January after the company lost tens of billions in market value and the founder stepped down along with the co-CEO.
RIM was once Canada's most valuable company with a market value of $83 billion in June 2008, but the stock has plummeted since, from over $140 share to around $10. Its decline is evoking memories of Nortel, another Canadian tech giant, which ended up declaring bankruptcy in 2009.
But Waterloo is home to more than 800 tech companies and is certainly no company town, many here insist. Smaller firms like e-learning company Desire2Learn have doubled their head count in the last year, and Google has opened an office here.
The chairman of the Center for International Governance and Innovation, a Waterloo-based think tank, likens Waterloo to Rochester, New York, where the blow of Kodak's bankruptcy filing is cushioned by the network of startups the company helped to spawn.
They've taken an enormous hit because of the collapse of Kodak, and Waterloo will take an enormous hit assuming that RIM ultimately vanishes from the scene, but the overall economy and region has been so fundamentally changed by RIM that it will actually do very well.
In an interview with The Associated Press at RIM headquarters in Waterloo, the CEO said he won't try to compete head-to-head with Apple but will try to build on RIM's strengths, such as its dominance of the corporate smartphone market. RIM says more than 90 percent of Fortune 500 companies use BlackBerry and that more than a million North American government workers rely on BlackBerry's software security.
But he acknowledges RIM failed to quickly adapt to the emerging bring your own device trend, in which employees bring their personal iPhones or Android devices to work instead of relying on BlackBerrys issued by their employers.
That's where BlackBerry 10 comes in — delayed but not too late to vie with the new Apple iPhone expected this fall, or so the company hopes. At the end of the day if the product is good you can always come back.
Other tech companies have indeed recovered from the ropes. The late Steve Jobs said Apple was less than three months away from bankruptcy when he rejoined it in 1997, and it's now the world's most valuable company.
President Barack Obama couldn't bear to part with his BlackBerry. Oprah Winfrey declared it one of her "favorite things." It could be so addictive that it was nicknamed "the CrackBerry."
Then came a new generation of competing smartphones, and suddenly the BlackBerry, that game-changing breakthrough in personal connectedness, looks ancient.
There is even talk that the fate of Research In Motion, the company that fathered the BlackBerry in 1999, is no longer certain as its flagship property rapidly loses market share to flashier phones like Apple's iPhone and Google's Android-driven models.
With more than $2 billion in cash, bankruptcy for RIM seems highly unlikely in the near term, but these are troubling times for Waterloo, Ontario, the town of 100,000 that was transformed by the BlackBerry into Canada's Silicon Valley. RIM is Canada's most valuable technology company, an international icon so prestigious that the founder and its other driving force, are on an official government list of national heroes, alongside the likes of Alexander Graham Bell.
RIM's U.S. share of the smartphone market belly-flopped from 44 percent in 2009 to 10 percent in 2011 according to market researcher NPD Group. The company still has 78 million active subscribers across the globe, but last month RIM issued a warning that it will lose money for the second consecutive quarter, will lay off workers this year, and has hired a team of bankers to help it weigh its options. Last July it slashed 2,000 jobs.
Of RIM's 16,500 remaining employees, 7,500 live in Waterloo, a university town 90 minutes' drive from Toronto, where everyone seems to know someone who works for RIM.
The decline of the BlackBerry has come shockingly fast. Just five years ago, when the first iPhone came out, few thought it could threaten the BlackBerry. Now the Chief Executive says his employees are getting asked all the time, 'What's going on with you guys? What happened? I mean RIM is the star of Canada and what happened to you guys? And how bad is it going to go?'
RIM's software is still focused on email, and is less user-friendly and agile than iPhone or Android. Its attempt at touch screens was a flop, and it lacks the apps that power other smartphones. Its tablet, the PlayBook, registered just 500,000 sales to Apple's 11.8 million in the last quarter despite a price cut from $500 to $200, well below cost.
RIM's hopes now hang on BlackBerry 10, a new operating system set to debut later this year. It's thoroughly redesigned for the new multimedia, Internet browsing and apps experience that customers are now demanding.
The CEO, formerly RIM's chief operating officer, says he can turn things around with BlackBerry. He took over in January after the company lost tens of billions in market value and the founder stepped down along with the co-CEO.
RIM was once Canada's most valuable company with a market value of $83 billion in June 2008, but the stock has plummeted since, from over $140 share to around $10. Its decline is evoking memories of Nortel, another Canadian tech giant, which ended up declaring bankruptcy in 2009.
But Waterloo is home to more than 800 tech companies and is certainly no company town, many here insist. Smaller firms like e-learning company Desire2Learn have doubled their head count in the last year, and Google has opened an office here.
The chairman of the Center for International Governance and Innovation, a Waterloo-based think tank, likens Waterloo to Rochester, New York, where the blow of Kodak's bankruptcy filing is cushioned by the network of startups the company helped to spawn.
They've taken an enormous hit because of the collapse of Kodak, and Waterloo will take an enormous hit assuming that RIM ultimately vanishes from the scene, but the overall economy and region has been so fundamentally changed by RIM that it will actually do very well.
In an interview with The Associated Press at RIM headquarters in Waterloo, the CEO said he won't try to compete head-to-head with Apple but will try to build on RIM's strengths, such as its dominance of the corporate smartphone market. RIM says more than 90 percent of Fortune 500 companies use BlackBerry and that more than a million North American government workers rely on BlackBerry's software security.
But he acknowledges RIM failed to quickly adapt to the emerging bring your own device trend, in which employees bring their personal iPhones or Android devices to work instead of relying on BlackBerrys issued by their employers.
That's where BlackBerry 10 comes in — delayed but not too late to vie with the new Apple iPhone expected this fall, or so the company hopes. At the end of the day if the product is good you can always come back.
Other tech companies have indeed recovered from the ropes. The late Steve Jobs said Apple was less than three months away from bankruptcy when he rejoined it in 1997, and it's now the world's most valuable company.
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Wednesday, October 27, 2010
Apple, Blackberry spar over Smartphone
Sydney Morning Herald
Canada's Research In Motion (RIM) fired back at Apple's Steve Jobs on Tuesday over his claims that the iPhone is outselling the Blackberry and that 18cm tablet computers have no future.
"We think many customers are getting tired of being told what to think by Apple," RIM co-chief executive Jim Balsillie said in a blog post responding to the comments made on Monday by Jobs.
"For those of us who live outside of Apple's distortion field, we know that seven-inch tablets will actually be a big portion of the market," Balsillie said after Jobs dismissed seven-inch (18cm) tablets as too small.
Advertisement: Story continues below
Blackberry is developing a touchscreen tablet computer called the PlayBook which features a seven-inch (18cm) screen in a bid to challenge Apple's iPad, which features a nearly 10-inch (25cm) screen.
Jobs, speaking to financial analysts during a conference call on Monday, dismissed seven-inch (18cm) tablets as "tweeners" saying they were "too big to compete with a smartphone and too small to compete with an iPad".
He suggested makers of seven-inch screens "include sandpaper so users can sand down their fingers" to be able to tap onscreen keys.
Balsillie struck back with criticism of Apple's refusal to allow Adobe's Flash video to play on the iPad.
"We know that Adobe Flash support actually matters to customers who want a real Web experience," he said.
"We also know that while Apple's attempt to control the ecosystem and maintain a closed platform may be good for Apple, developers want more options and customers want to fully access the overwhelming majority of websites that use Flash."
During his earnings call, Jobs also said that the iPhone "handily" outsold BlackBerry during the quarter and he didn't see the RIM handsets catching up any time soon.
Apple sold 14.1 million iPhones during the quarter, up 91 per cent from a year ago.
"RIM has achieved record shipments for five consecutive quarters and recently shared guidance of 13.8 to 14.4 million BlackBerry smartphones for the current quarter," Balsillie said.
"Apple's preference to compare its September-ending quarter with RIM's August-ending quarter doesn't tell the whole story because it doesn't take into account that industry demand in September is typically stronger," he said.
"As usual, whether the subject is antennas, Flash or shipments, there is more to the story and sooner or later, even people inside the distortion field will begin to resent being told half a story," the RIM co-CEO said.
"We think many customers are getting tired of being told what to think by Apple," RIM co-chief executive Jim Balsillie said in a blog post responding to the comments made on Monday by Jobs.
"For those of us who live outside of Apple's distortion field, we know that seven-inch tablets will actually be a big portion of the market," Balsillie said after Jobs dismissed seven-inch (18cm) tablets as too small.
Advertisement: Story continues below
Blackberry is developing a touchscreen tablet computer called the PlayBook which features a seven-inch (18cm) screen in a bid to challenge Apple's iPad, which features a nearly 10-inch (25cm) screen.
Jobs, speaking to financial analysts during a conference call on Monday, dismissed seven-inch (18cm) tablets as "tweeners" saying they were "too big to compete with a smartphone and too small to compete with an iPad".
He suggested makers of seven-inch screens "include sandpaper so users can sand down their fingers" to be able to tap onscreen keys.
Balsillie struck back with criticism of Apple's refusal to allow Adobe's Flash video to play on the iPad.
"We know that Adobe Flash support actually matters to customers who want a real Web experience," he said.
"We also know that while Apple's attempt to control the ecosystem and maintain a closed platform may be good for Apple, developers want more options and customers want to fully access the overwhelming majority of websites that use Flash."
During his earnings call, Jobs also said that the iPhone "handily" outsold BlackBerry during the quarter and he didn't see the RIM handsets catching up any time soon.
Apple sold 14.1 million iPhones during the quarter, up 91 per cent from a year ago.
"RIM has achieved record shipments for five consecutive quarters and recently shared guidance of 13.8 to 14.4 million BlackBerry smartphones for the current quarter," Balsillie said.
"Apple's preference to compare its September-ending quarter with RIM's August-ending quarter doesn't tell the whole story because it doesn't take into account that industry demand in September is typically stronger," he said.
"As usual, whether the subject is antennas, Flash or shipments, there is more to the story and sooner or later, even people inside the distortion field will begin to resent being told half a story," the RIM co-CEO said.
Thursday, September 30, 2010
BlackBerry PlayBook to take on the iPad
USA Today
BlackBerry-maker Research In Motion just unveiled its answer to Apple's iPad -- the BlackBerry Playbook.
The tablet PC is aimed at professionals, who already make up RIM's core market. Here's how it compares to the iPad:
BlackBerry PlayBook
Screen size 7 inches
Weight 0.9 pounds
Thickness 0.4 inches
Storage 1 GB
Connectivity Wi-Fi + cellular through a BlackBerry
Cameras Two (front and back)
Apple iPad (several models available)
Screen size 9.7 inches
Weight 1.5 pounds or 1.6 pounds
Thickness 0.5 inches
Storage 16, 32, or 64 GB
Connectivity Wi-Fi or Wi-Fi + cellular through AT&T
Cameras None
Research in Motion showed off the tablet for the first time Monday and is set to launch it early 2011, with an international rollout later in the year. With it RIM is betting on a smaller, lighter device than Apple's iPad, which kicked-started the tablet market when it launched in April.
The PlayBook will have a 7-inch screen, making it half the size of the iPad, and weigh about to the iPad's. And unlike the iPad, it will have two cameras, front and back.
The PlayBook will be able to act as a second, larger screen for a BlackBerry phone, through a secure short-range wireless link. When the connection is severed — perhaps because the user walks away with the phone — no sensitive data like company e-mails are left on the tablet. Outside of Wi-Fi range, it will be able to pick up cellular service to access the Web by linking to a BlackBerry.
But the tablet will also work as a standalone device. RIM co-Chief Executive Jim Balsillie said its goal is to present the full Web experience of a computer, including the ability to display Flash, Adobe Systems's format for video and interactive material on the Web. That means the tablet will be less dependent on third-party applications or "apps," Balsillie said.
"I don't need to download a YouTube app if I've got YouTube on the Web," said Balsillie, who leads the company along with co-CEO Mike Lazaridis.
Apple CEO Steve Jobs has resisted allowing Flash on any of the company's mobile gadgets, arguing the software has too many bugs and sucks too much battery life.
"Much of the market has been defined in terms of how you fit the Web to mobility," Balsillie said. "What we're launching is really the first mobile product that is designed to give full Web fidelity."
In part, the PlayBook is a move by RIM to protect its position as the top provider of mobile gadgets for the business set. Balsillie says he has had briefings with company chief information officers and "this is hands-down, slam-dunk what they're looking for."
Analysts agree that RIM's close relationship with its corporate clients could help the company establish a comfortable niche in the tablet market despite Apple's early lead.
"We do think that RIM has a play with enterprise customers because it has established relationships with so many businesses, and its technology is so deeply integrated with their IT departments," IDC analyst Susan Kevorkian said.
RIM is using a new operating system, built by QNX Software Systems, which it took over earlier this year, to harness the power of the tablet, but Balsillie said it will run existing apps for BlackBerry phones.
IDC predicts that the corporate market for tablet computers will grow as a portion of overall sales over the next few years. The firm forecasts that roughly 11% of overall tablet shipments, or 6.5 million units, will be to businesses, government agencies or schools by 2014. That would be up from just 2%, or 300,000 units, this year. And that figure doesn't count those who buy tablet computers on their own and use them for work.
RIM doesn't want the PlayBook to be just for work — the company invited video game maker Electronic Arts to help introduce the Playbook at an event in San Francisco on Monday — but it's clear that its advantages will lie in the work arena.
The iPad has prompted a wave of competitors, so RIM won't be alone going after the tablet market. Computer maker Dell came out with its own tablet computer in August called the Streak. Samsung Electronics plans to launch the Galaxy Tab next month and has already lined up all four major U.S. carriers to sell it and provide wireless service for it. Cisco Systems is also going after business customers with a tablet called the Cius early next year.
The PlayBook will have a 7-inch screen, making it half the size of the iPad, and weigh about to the iPad's. And unlike the iPad, it will have two cameras, front and back.
The PlayBook will be able to act as a second, larger screen for a BlackBerry phone, through a secure short-range wireless link. When the connection is severed — perhaps because the user walks away with the phone — no sensitive data like company e-mails are left on the tablet. Outside of Wi-Fi range, it will be able to pick up cellular service to access the Web by linking to a BlackBerry.
But the tablet will also work as a standalone device. RIM co-Chief Executive Jim Balsillie said its goal is to present the full Web experience of a computer, including the ability to display Flash, Adobe Systems's format for video and interactive material on the Web. That means the tablet will be less dependent on third-party applications or "apps," Balsillie said.
"I don't need to download a YouTube app if I've got YouTube on the Web," said Balsillie, who leads the company along with co-CEO Mike Lazaridis.
Apple CEO Steve Jobs has resisted allowing Flash on any of the company's mobile gadgets, arguing the software has too many bugs and sucks too much battery life.
"Much of the market has been defined in terms of how you fit the Web to mobility," Balsillie said. "What we're launching is really the first mobile product that is designed to give full Web fidelity."
In part, the PlayBook is a move by RIM to protect its position as the top provider of mobile gadgets for the business set. Balsillie says he has had briefings with company chief information officers and "this is hands-down, slam-dunk what they're looking for."
Analysts agree that RIM's close relationship with its corporate clients could help the company establish a comfortable niche in the tablet market despite Apple's early lead.
"We do think that RIM has a play with enterprise customers because it has established relationships with so many businesses, and its technology is so deeply integrated with their IT departments," IDC analyst Susan Kevorkian said.
RIM is using a new operating system, built by QNX Software Systems, which it took over earlier this year, to harness the power of the tablet, but Balsillie said it will run existing apps for BlackBerry phones.
IDC predicts that the corporate market for tablet computers will grow as a portion of overall sales over the next few years. The firm forecasts that roughly 11% of overall tablet shipments, or 6.5 million units, will be to businesses, government agencies or schools by 2014. That would be up from just 2%, or 300,000 units, this year. And that figure doesn't count those who buy tablet computers on their own and use them for work.
RIM doesn't want the PlayBook to be just for work — the company invited video game maker Electronic Arts to help introduce the Playbook at an event in San Francisco on Monday — but it's clear that its advantages will lie in the work arena.
The iPad has prompted a wave of competitors, so RIM won't be alone going after the tablet market. Computer maker Dell came out with its own tablet computer in August called the Streak. Samsung Electronics plans to launch the Galaxy Tab next month and has already lined up all four major U.S. carriers to sell it and provide wireless service for it. Cisco Systems is also going after business customers with a tablet called the Cius early next year.
Monday, September 20, 2010
BlackBerry Gets Squeezed by Rivals
The Wall Street Journal
BlackBerry maker Research In Motion Ltd. posted a surge in quarterly profit and revenue, though it added fewer new subscribers than it had expected amid intensifying competition in the U.S.
RIM said it shipped 12.1 million devices to wireless carriers and stores in its fiscal second quarter, up 45% from a year ago. But the company added 4.5 million net new BlackBerry subscribers in the quarter, down from 4.9 million in the preceding quarter. It had expected to add between 4.9 million to 5.2 million accounts in the period.
Co-CEO Jim Balsillie said subscriber growth initially was hurt by competing products entering the market during the summer and by weakness in Middle East markets due to concerns local service could be interrupted due to disputes with governments over security issues.
Mr. Balsillie said RIM remains in discussions with India and the United Arab Emirates to resolve concerns about their inability to monitor encrypted communication over BlackBerrys and is optimistic about a positive resolution.
The Canadian company has long held sway over the corporate market for smartphones. But it is falling behind Apple Inc. and makers of devices based on Google Inc. software in the race to sell high-end phones to consumers. Apple launched its iPhone 4 on June 24, and Verizon Wireless rolled out updates to its Droid line this summer.
RIM launched the Torch, which has a touchsreen and slide-out keypad, with just over two weeks remaining in the quarter, which ended Aug. 28. Mr. Balsillie said the launch was the most successful in the company's history, but he didn't disclose how many units sold.
Analysts have warned that initial sales have been weak. RIM said it expects stronger sales and subscriber gains in the third quarter, when the Torch, which launched exclusively with AT&T Inc., will hit more markets.
Mr. Balsillie said subscriber additions were particularly soft early in the second quarter but strengthened following the release of the Torch and remained stronger in the current quarter.
RIM, however, said it will stop forecasting subscriber additions or disclosing its average selling prices after December—two closely watched gauges of its business.
RIM's failure to keep up with the iPhone and Android devices in the consumer market is starting to erode its hold on business customers, as employees press their companies to let them use their personal devices at work. Over the past year, Apple and Google have been upgrading their software to attract corporate clients.
Research firm IDC expects BlackBerry to lose business market share for the first time this year. IDC forecasts that BlackBerry world-wide will drop to 36.4% from 39.9% last year. Meanwhile, Apple's iPhone is expected to rise to 8.7% from 8%, Android is expected to increase to 1.1% from 0.4%, and Microsoft Corp.'s Windows will jump to 27.8% from 25.6%.
"RIM is under a significant threat, and we now expect the contribution to earnings of the corporate segment to shrink going foward," wrote Sanford Bernstein analyst Pierre Ferragu, which surveyed companies and found nearly three-quarters are preparing to support non-BlackBerry devices.
Staying competitive may require price cuts. In February, RIM released a free version of its enterprise server for small and medium sized businesses. The software only works with Microsoft email software and supports up to 2,000 users with a separate computer server and limited ability to monitor and control phone usage.
Alex Yanez, telecommunications engineer at retailer Patagonia Inc., said RIM has also been cutting its prices of the standard BlackBerry server and software. "The server license and the seat license has come down quite a bit," said Mr. Yanez. Prices "have come down very much."
A RIM spokeswoman wouldn't comment on price cuts.
RIM said it shipped 12.1 million devices to wireless carriers and stores in its fiscal second quarter, up 45% from a year ago. But the company added 4.5 million net new BlackBerry subscribers in the quarter, down from 4.9 million in the preceding quarter. It had expected to add between 4.9 million to 5.2 million accounts in the period.
Co-CEO Jim Balsillie said subscriber growth initially was hurt by competing products entering the market during the summer and by weakness in Middle East markets due to concerns local service could be interrupted due to disputes with governments over security issues.
Mr. Balsillie said RIM remains in discussions with India and the United Arab Emirates to resolve concerns about their inability to monitor encrypted communication over BlackBerrys and is optimistic about a positive resolution.
The Canadian company has long held sway over the corporate market for smartphones. But it is falling behind Apple Inc. and makers of devices based on Google Inc. software in the race to sell high-end phones to consumers. Apple launched its iPhone 4 on June 24, and Verizon Wireless rolled out updates to its Droid line this summer.
RIM launched the Torch, which has a touchsreen and slide-out keypad, with just over two weeks remaining in the quarter, which ended Aug. 28. Mr. Balsillie said the launch was the most successful in the company's history, but he didn't disclose how many units sold.
Analysts have warned that initial sales have been weak. RIM said it expects stronger sales and subscriber gains in the third quarter, when the Torch, which launched exclusively with AT&T Inc., will hit more markets.
Mr. Balsillie said subscriber additions were particularly soft early in the second quarter but strengthened following the release of the Torch and remained stronger in the current quarter.
RIM, however, said it will stop forecasting subscriber additions or disclosing its average selling prices after December—two closely watched gauges of its business.
RIM's failure to keep up with the iPhone and Android devices in the consumer market is starting to erode its hold on business customers, as employees press their companies to let them use their personal devices at work. Over the past year, Apple and Google have been upgrading their software to attract corporate clients.
Research firm IDC expects BlackBerry to lose business market share for the first time this year. IDC forecasts that BlackBerry world-wide will drop to 36.4% from 39.9% last year. Meanwhile, Apple's iPhone is expected to rise to 8.7% from 8%, Android is expected to increase to 1.1% from 0.4%, and Microsoft Corp.'s Windows will jump to 27.8% from 25.6%.
"RIM is under a significant threat, and we now expect the contribution to earnings of the corporate segment to shrink going foward," wrote Sanford Bernstein analyst Pierre Ferragu, which surveyed companies and found nearly three-quarters are preparing to support non-BlackBerry devices.
Staying competitive may require price cuts. In February, RIM released a free version of its enterprise server for small and medium sized businesses. The software only works with Microsoft email software and supports up to 2,000 users with a separate computer server and limited ability to monitor and control phone usage.
Alex Yanez, telecommunications engineer at retailer Patagonia Inc., said RIM has also been cutting its prices of the standard BlackBerry server and software. "The server license and the seat license has come down quite a bit," said Mr. Yanez. Prices "have come down very much."
A RIM spokeswoman wouldn't comment on price cuts.
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