Is Research In Motion dying? Its finances and sales certainly don’t look healthy. The Canadian maker of the ubiquitous Blackberry device on Thursday reported lower shipments than expected of its flagship product, as well its PlayBook tablet.
That contributed to a dramatic decline in profits by 59 percent to $329 million for the second quarter of 2011, down from $797 million for the same period a year earlier. The numbers come from its second quarter earnings report ending August 27. The report was issued after the U.S. markets closed Thursday.
Shares of the company dropped sharply in after-hours trading by 18.75 percent to $24.06.
The company said that it shipped fewer Blackberries than expected, despite an upgrade of the product. During the second quarter, RIM shipped approximately 10.6 million BlackBerry smartphones and approximately 200,000 BlackBerry PlayBook tablets.
That 200,000 number is less than half of what financial analysts had expected. They had expected shipments of 2.2 million.
Apple, in contrast sold 9.25 million iPads last quarter alone, according to Bloomberg.
Still the company reported that its subscriber base grew 40 percent in the past year to exceed 70 million.
Financial analysts said that they were disappointed by RIM’s results, especially the shipment numbers for the PlayBook.
But perhaps they shouldn’t have been. The tablet had been pretty much universally panned when it came out earlier this year. Inexplicably (or perhaps sadly predictably) RIM’s tablet doesn’t have independent e-mail functionality. Users have to use the tablet in conjunction with their Blackberries in order to send e-mail.
RIM has continually been losing market share in the past year to smartphone makers Apple and Google.
RIM’s products have been favored by government entities because of its government-approved encryption system. But even there, Apple is making inroads. Several government departments in the United States are already encouraging the use of iPads by their staffers, and the National Institute of Standards and Technology, which certifies gadgets for secure use by government workers, is currently testing secure configurations for government use.
