RIM Q2 2013 Earnings Call Recap

The news was not too bad this evening as RIM CEO Thorstein Heins and some VPs conducted their quarterly earnings call, recapping the second quarter of fiscal 2013 to investors. Though the BlackBerry 10 is still a ways into the future – and anyone who follows the organization from afar is more anticipatory than reflective – Q2 seemed to be a relatively good three months for RIM compared to the death predictions of some. Though RIM’s income statement showed a net loss (as was certainly expected) to the tune of $235 million ($0.45 per share diluted), other revelations of the day indicated that there may just be some hope for the future of the organization.

The most significant news imparted by Thorsten Heins was probably that the BlackBerry 10 launch is still on track for the 1st quarter of calendar year 2013. Another delay in the release of the next generation of BlackBerry would result in even more of a goodwill deficiency among BlackBerry stakeholders. In speaking of the BlackBerry 10, Heins optimistically stated that he felt that the BlackBerry 10 would “help generate the next generation of mobile computing.” In support of that claim, he spoke of the BlackBerry Hub which will help users navigate “throughout the platform faster and easier, with the touch of one finger.” He also predicted social networking’s continued growth with the Hub’s easy navigation. (Frankly, considering the proliferation of social media channels and their allure to nearly every segment of the population, its growth could probably be expected even without the Hub.)

As part of RIM’s CORE program, Heins said, RIM’s plan are to realize $1 billion in savings in the 2013 fiscal year. He mentioned difficult decisions that had to be made, presumably referring to the reduction of RIM manpower by 2,000 over the quarter to 14,500. Though the conference call touted words like “lean” and “efficient” in describing the organization, the $350 million saved thus far by the CORE program can hardly be considered inconsequential. That said, there may be some merit to Heins’ portrayal of the remaining RIM employees comprising a more passionate and exciting workforce.

What was surprising to me, I must say, was the good news provided with regard to existing BlackBerry products. The BlackBerry subscriber base rose this quarter, as did revenues and cash. Discussing this, Heins repeatedly defended the legitimacy of BlackBerry 7 as a competitive operating system, mentioning the introduction (in some markets) of new BlackBerry 7 devices. He also attributed the new subscribers in part to the great popularity of BBM in certain markets (Indonesia, South Africa and others), saying that “you go into [some] countries and you see how BBM is just ‘kicking it.’” On the other hand, PlayBook sales were way down despite some significant attempts at promoting it of late (I’m thinking specifically about NYC’s PlayBook Experience Center).

Of the questions fielded, many focused on the BlackBerry 10. Some of what was revealed was certainly of interest. For one thing, Heins said that while BB10 will launch with high tier devices, mid-tier devices could be out in Q4 of the fiscal year and “entry-level” devices, which are in planning stages, are somewhat further out on the horizon (but could be out next year).

Heins also claimed that “the display on the full-touch device will be beyond that of the iPhone 5.” He used the display quality in an attempt at dispelling the notion that the new devices will not be able to excite consumers.

It was also stated that the launch of BlackBerry 10 will be global. Still some months in advance of its release, Heins spoke of 40 partners in 16 countries so far with which RIM will be working on the launch.

Compared with three months ago, it’s certainly easy to feel optimistic about RIM’s position. While the news was not all perfectly good, the Q2 Earnings Call seemed to provide encouragement to followers and fans of BlackBerry devices. While it’s still too early to tell what the reception will be for the forthcoming launch of BlackBerry 10, today’s news certainly bodes well for the future of RIM.

2 total comments on this postSubmit your comment!
  1. Simplified version: They are going to have plenty of money in the bank to get BB10 out the door and properly advertise it. They are not going to die in the next 6 months even if BB10 doesn’t come out. If BB10 is a solid product and they sell decently initially, RIM will be fine for the next 10 years and the stock will go through the roof.

  2. It always surprises me a bit that the analyst comminity is surprised by RIM’s continued grwoth in subscribers. News Flash: there is a whole big world out there beyond the United States.

    WHile the US is a rish and important market, it just isn’t as important as it once was an will likely never achieve that status again (at least in my lifetime).

    People continually worry about how RIM and BB10 will do in the US. It’s likely that Europe and Indonesia are more important. RIM can work on the tough slog back up the hill in the US. If they grow their staus in Europe and convert current blackberry owners in Asia (including India) to higher end Blackberry’s they will do fine.

    It won’t be very long before the middle class in China is larger than the middle class in the US. That should stop and make you think about corporate strategy.

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