Following days of reports predicting job cuts, Research In Motion said it expects to report an operating loss for its first fiscal quarter ending June 2 due to continued slow sales of its core BlackBerry products. The news follows a $125 million loss posted by the Canadian firm during its fourth fiscal quarter of 2012.
In a press release, RIM’s CEO Thorsten Heins said that while the company continues to face challenges in the market, it expects to bolster the $2.1 billion cash position RIM took into its current quarter.
“In terms of challenges, as I mentioned on the March financial results conference call, RIM is going through a significant transformation as we move towards the BlackBerry 10 launch, and our financial performance will continue to be challenging for the next few quarters,” Heins said. “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. We are continuing to be aggressive as we compete for our customers’ business – both enterprise and consumer – around the world, and our teams are working hard to provide cost-competitive, feature-rich solutions to our global customer base.”
International markets have become increasingly important for the company as well. RIM noted that of the approximately 78 million customers that use its BlackBerry e-mail platform, 56 million are from outside the United States, where it said it continues to see increased churn.
RIM’s BlackBerry phones have been steadily losing market share to iOS and Android smartphones. IDC reports that BlackBerry had just 6.4% of the smartphone market in the first quarter, down from 13.6% a year ago.
RIM noted that there were now 80,000 applications developed for its smartphone operating system and more than 15,000 applications for its PlayBook tablet. This compared with the nearly 500,000 applications developed so far for Apple’s iOS and Google’s Andorid OS.
RIM’s stock (RIMM) was trading down more than 7% early Wednesday on the news.
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