Research In Motion issued a press release regarding the news that the company was sitting on $1 Billion worth of unsold BlackBerry smartphones and PlayBooks. RIM’s CEO, Thorsten 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.”
Additionally, RIM announced that they’ve hired J.P. Morgan Securities LLC and RBC Capital Markets to “assist the Company and our Board of Directors in reviewing RIM’s business and financial performance. These advisors have been tasked to help us with the strategic review we referenced on our year-end financial results conference call and to evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives.”
The key part to what Heins mentions in RIM’s engagement with J.P. Morgan and RBC Capital Markets, is “partnerships, licensing opportunities and strategic business model alternatives.” For quite awhile now we’ve heard rumors of Samsung looking to license the BlackBerry 10 operating system. Sammy is getting sick of Android’s fragmentation and even more, fretting over Google’s intimate relationship with Motorola. Thus, it could be a win-win for RIM to license BB10 to Samsung. At this point, with RIM’s shares trading in the single digits, any largely revenue generating opportunity could be an option.
RIM is losing money in the hardware sector. While our poll shows BlackBerry users want RIM to keep making their own hardware, it might soon become a thing of the past. Jefferies analyst, Peter Misek, has calculated in a note to clients that after assigning operating costs and including inventory charges, the hardware division likely spent 4% more than it took in. Could this mean we might see RIM one day be solely a software company?
It is still a bit early to tell, but the signs are beginning to show. Nonetheless, as we’ve pointed out, RIM has made some substantial acquisitions. Perhaps it is only a matter of time until RIM can play all of their cards. RIM will be reporting results for the first quarter of fiscal 2013 on June 28, 2012 after the close of the market. The Company will discuss today’s announcement and first quarter fiscal 2013 results on aconference call and live webcast beginning at 5 pm ET, June 28, 2012. The call can be accessed by dialing 1-800-814-4859 or at www.rim.com/investors/events/index.shtml.