Research In Motion (RIM) reported second quarter results for the three month period ended August 27, 2011, and a cursory glance would lead one to believe RIM is on top of the world. RIM reports service revenue surpassed the $1 billion mark for the first time, its BlackBerry subscribe base is up 40 percent year-over-year to surpass 70 million, and BlackBerry smartphone shipments are estimated to grow up to 37 percent in Q3. But wait a minute, how can RIM be doing so well when all anyone talks about are iOS and Android?
Not all of the numbers are positive, and some clank hard off of RIM. Revenue, for example, fell 15 percent to $4.2 billion and is down 10 percent from the same quarter last year. The dropoff is largely representative of RIM's hardware, which accounts for nearly three-fourths of total revenue. RIM only managed to move 200,000 BlackBerry PlayBook tablets, which pales in comparison to the competition and was nowhere close RIM's reduced outlook of 490,000 units. RIM didn't even attempt to hype PlayBook sales, focusing on smartphones instead, and even there the demand wasn't what RIM had hoped it would be.
"We successfully launched a range of BlackBerry 7 smartphones around the world during the latter part of the second quarter and we are seeing strong sell-through and customer interest for these new products," said Jim Balsillie, Co-CEO at RIM. "Overall unit shipments in the quarter were below our forecast due to lower than expected demand for older models."
RIM also reported GAAP net income of $329 million for the quarter, or $0.63 per share, down significantly from the previous quarter when net income was $695 million, or $1.33 per share. The company's stock is down, and RIM is leaning on old products to fend off the competition.
"From our take, it confirms our check that $200 Android phones are taking share away, and older BlackBerry products fading away quickly," said Mike Walkley, an analyst for Canaccord Genuity, according to CNet.