RIM Revenues Decrease As Co-CEOs’ Pay Cut To $1

Research in Motion has reported lower than expected revenues for the third quarter of its fiscal 2012 and announced that its co-CEO’s salaries will be reduced to just one dollar.

RIM’s revenues of $5.2 billion (£3.5bn) were up 24 percent higher than the previous quarter, but down by six percent from the same quarter last year as Net income fell 71 percent year-on-year to $265 million (£171m).

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BlackBerry subscribers increased 35 percent year-over-year, to 75 million, and RIM reported shipments of approximately 14.1 million BlackBerry smartphones and 150,000 PlayBook tablets. For the quarter, the company also took a $54 million (£35m) write-down due to the costs associated with a BlackBerry service interruption.

During a conference call on 15 December, RIM co-CEO Jim Balsillie acknowledged the company’s struggles. “We’re in the process of completing the largest organisational and platform transition in the company’s history,” he told media and analysts. “We recognise our shareholders may feel we have fallen short.”

He also expressed dissatisfaction with RIM’s performance in the United States, but suggested that a “comprehensive review of all aspects of the business” was under way. That review would apparently focus on areas including the RIM product portfolio, manufacturing, and research and development.

RIM took a substantial charge against its PlayBook inventory, totalling $485 million (£312m) before taxes. RIM co-CEO Mike Lazaridis insisted to those on the earnings call that RIM remained “committed” to the device, which he touted as “the most secure and advanced tablet on the market today.” Recent price cuts at retailers such as Best Buy have spiked consumer sales, albeit at the possible cost of RIM’s margins on each device sold.

Understandably, RIM executives emphasised what they saw as the positive aspects of the company’s performance.

Pay Cut

“We are more determined than ever to capitalise on our strengths to overcome the recent execution challenges surrounding product launches and the resulting financial performance,” Balsillie and Lazaridis, whose annual salaries have been reduced to $1 (£0.65), effective immediately, wrote in a statement ahead of the company’s earnings call. “We continue to evaluate ways to improve in several areas of the company’s operations. It may take some time to realise the benefits of these efforts and the platform transition we are undertaking.”

RIM’s turnaround plan centres on an upcoming series of smartphones running a QNX-based operating system named BlackBerry 10. RIM executives have emphasised these devices’ supposed ability to compete toe-to-toe against BlackBerry’s highest-end rivals, although they have yet to share an exact release date beyond the latter half of 2012. BlackBerry 10 was formerly known as BBX, with RIM changing the name in the face of a brewing trademark battle with Basis International, which markets business software and also claims the “BBX” name.

During the call, Lazaridis suggested that the devices running BlackBerry 10 would feature dual-core processors, with an emphasis on power and efficiency. “Industrial design we believe is critical,” he added.