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RIM abandons consumer market


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Research In Motion announces a massive shake-up, abandoning the consumer space to focus exclusively on business and enterprise products, amid falling revenues and multiple executive departures.

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RIM's quarterly earnings announcement has revealed quite a few juicy bits of information today - but perhaps the most extraordinary of all is the news that the company is effectively withdrawing from the consumer device market.

CEO Thorsten Heins told investors that the company will no longer try to be "all things to all people", and going forward it will now focus exclusively on developing products and services for business and enterprise.

This change in strategy comes just a few weeks ahead of the first glimpse of the new BlackBerry 10 operating system, with developers soon being given preview devices - although our best understanding is that this won't be BB10 in its truest sense, but rather a reworked version of the PlayBook's QNX OS, which developers will be able to use to create apps for the company's new smartphone platform.

Along with revealing how many PlayBooks and BlackBerry handsets it shipped last quarter, a few other details also emerged:

  • Quarterly revenues fell 19% on the previous quarter to $4.2bn (down 25 year on year)
  • GAAP net loss of $125m for the quarter
  • Former co-CEO Jim Balsillie has now resigned from the board of directors
  • The company's chief operations officer, Jim Rowan, and chief technology officer, David Yach, will also be leaving the company
So where does all this leave RIM? There's no sugar-coating it: the company seems to be in a fairly desperate state. The financial figures paint a sorry picture to say the least - after last year's share price freefall, there's been no real sign of improvement, with the value of the company's stock still remaining well below its book value.

Meanwhile, its customers are clearly deserting the platform in droves, and key executives are also leaving the company as it prepares to finally release its much-delayed next-generation operating system. Even its chief executive admits that the company's new plan - abandoning its failed efforts in the consumer space to focus solely on business - offers "no guarantee of success".

But however grim things are looking right now, it's also clear that some pretty big decisions are being made at Research In Motion, and this might be an indication that RIM is finally on the right track, making realistic choices based around the company's strengths, rather than chasing unrealistic dreams.

Will RIM's plan work? Is the company making the right decision here by ceding the consumer space, and focusing solely on business? Do you think they'll be able to deliver their next-generation BB10 products on time? Let us know your thoughts in the comments below.

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RIM: You misunderstood, we're not leaving the consumer market

RIM clarifies its position, saying it will 'refocus' its efforts on business markets, building on its strengths, without trying to be 'all things to all people', but will still target consumers (!?).

Last night, Research In Motion delivered its quarterly earnings review, and the news was pretty terrible across the board. The big take-away from the announcement was RIM’s withdrawal from the consumer device market, as years of same-again handsets and a failure to keep up with major improvements seen in rival operating systems appeared to have finally caught up with the company.

It was, perhaps, the one glimmer of hope in an otherwise disastrous set of results. It appeared that the company might be getting realistic about its prospects, choosing to focus on its strengths in business, rather than chasing dreams of relevance among consumers. We weren’t the only ones to have been left with the clear and unambiguous impression that RIM planned to put all of its eggs in the business and enterprise basket.

BBC News and Sky News both broadcast the breaking news of RIM’s exit from the sector live last night, while The Guardian, The Washington Times, CBS News, Time, MSNBC, Digital Spy, The Register and just about everyone else who heard the earnings call or read RIM’s accompanying news release was left with one message: the company had pretty much thrown in the towel on the consumer market, and would focus solely on business.

But today, RIM is denying that it is to exit the consumer market. The company’s managing director of Global Sales & Regional Marketing, Patrick Spence, today told Pocket-lint:

The claim that RIM has said it will withdraw from the consumer market is wholly inaccurate. While we announced plans to re-focus our efforts on our core strengths, and on our enterprise customer base, we were very explicit that we will continue to build on our strengths to go after targeted consumer segments. We listed BBM, as well as the security and manageability of our platform, among these strengths."

And yet last night, RIM’s CEO, Thorsten Heins, made his own ‘explicit’ statement that RIM plans “to refocus on the enterprise business and capitalise on our leading position in this segment. We believe that BlackBerry cannot succeed if we tried to be everybody’s darling and all things to all people. Therefore, we plan to build on our strength.”

But today’s ‘clarifications’ on the company’s strategy evidently contradict that statement. Heins claims that the company can’t compete effectively by targeting all markets, yet by sticking to its failing strategy of pursuing both business and consumer sales, it’s evidently not ‘focusing’ on business and enterprise, nor is it consolidating around its strengths.

As if it wasn’t bad enough that the company is persisting with the strategy that has seen its share price fall by 80% in the last twelve months, it’s even less encouraging that the company couldn’t even articulate its strategy properly last night, and that’s it’s been forced to issue such clarifications on its plans today.

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