RIM forecasts loss; unsold inventory surges to $1B in value
updated 07:26 pm EDT, Tue May 29, 2012
Bankers called in to guide turnaround
Research In Motion has admitted that its fiscal first-quarter, which ends on June 2, is expected to show an operating loss as the BlackBerry maker continues to struggle in the smartphone and tablet markets. Amid the chaos, the company has called on JP Morgan and RBC to render assistance in the ongoing restructuring and transformation.
"The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter," said CEO Thorsten Heins in a statement.
The company has added two fresh executives, including new Chief Operating Officer Kristian Tear and Chief Marketing Officer Frank Boulben.
Heins also reiterated RIM's commitment to bringing $1 billion in savings by the end of the fiscal year, through "significant spending reductions and headcount reductions," though the company has yet to fully detail the number of employees that will be displaced.
Despite the promise of a turnaround, the company's unsold inventory is believed to be growing. Some analysts expect the company to write off over $1 billion in inventory, as BlackBerry handset and tablet sales continue to slide, according to a Bloomberg report.
RIM is relying on its upcoming mobile OS, BlackBerry 10, to power a range of new devices that it hopes will prove competitive in the marketplace. The company was late to release a touchscreen device, falling behind Apple and Google, despite having a significant head start in the smartphone market with its QWERTY-based models.
The company earlier this month showed off a development handset, however the next models to be sold to the public have yet to be formally unveiled. Developers inspecting the BlackBerry 10 source code uncovered seven different code-names that are believed to be associated with upcoming devices, the first of which are not expected to arrive until the fall.
