BlackBerry profit down by 58%

Added by Erik West on September 16, 2011

Research In Motion, the maker of BlackBerry devices, said its second quarter profit fell by 58.7% on Thursday, along with a 10% drop in revenue. Jim Balsillie, RIM’s co-chief executive, blamed the bad news on sagging sales of their aging line of smartphones.

RIM performed poorly overall, shipping about 10.9m BackBerry smartphones – about 1m fewer than expected – and shipped about 200,000 of their PlayBook tablet devices – less than half the expected volume.

RIM recently released a series of new models, known as BlackBerry 7, yet they are broadly considered to be updates of an old line of products and do not match the performance and features of newer handsets, like Apple’s iPhone or a range of Android-based devices.

Analysts see RIM falling further behind competitors amid expectations that Apple may release an update to the iPhone next month, Google’s recent purchase of Motorola, and Nokia’s support of Microsoft’s Windows Phone 7 – all long before RIM plans to release the next major updates to the BlackBerry line of products.

RIM has had a string of problems related to its PlayBook device, its version of a tablet computer. Among the problems are a lack of applications, and the devices inability to directly receive BlackBerry email, yet RIM said a number of major flaws could be fixed soon. The PlayBook is selling poorly on the overall market with the co-CEO, Mike Lazaridis, saying that many of the devices are still sitting on store shelves and that RIM hopes to sell them by offering rebates and improvements to software.

Jim Balsillie is reported to have said that he expects strong sales of BlackBerry devices during the holiday season; however, analysts are not as optimistic based on the company’s performance and planned release of products.