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Research In Motion Reports First Quarter Fiscal 2013 Results – BB10 Delayed!

WATERLOO, ONTARIO–(Marketwire – June 28, 2012) – Research In Motion Limited (RIM) (NASDAQ:RIMM)(TSX:RIM), a world leader in the mobile communications market, today reported first quarter results for the three months ended June 2, 2012 (all figures in U.S. dollars and U.S. GAAP, except where otherwise indicated).

Highlights:

  • Cash, cash equivalents, short-term and long-term investments increased to $2.2 billion at the end of the first quarter
  • Cash flow from operations was approximately $710 million in the first quarter
  • Revenue of $2.8 billion in Q1, down 33% from $4.2 billion in the prior quarter
  • GAAP net loss in Q1 of $518 million or $0.99 per share diluted; adjusted net loss of $192 million or $0.37 per share diluted
  • Shipments of BlackBerry smartphones were 7.8 million and shipments of BlackBerry PlayBook tablets were approximately 260,000
  • BlackBerry 10 smartphone launch now scheduled for Q1 of calendar 2013
  • Restructuring efforts underway that will include a workforce reduction of approximately 5,000 employees as part of RIM’s efforts to realize over $1 billion in cost savings, based on RIM’s Q4 FY2012 run rate
  • Launched World Tour BlackBerry Jam developer sessions in 23 countries resulting in strong adoption and support by application and developer partners for BlackBerry 10 platform
  • BlackBerry App World continues to grow with over 89,000 applications available
  • The overall BlackBerry subscriber base continued to grow, and the subscriber base grew in all regions except for North America
  • RIM names Steve Zipperstein, former General Counsel of Verizon Wireless, as Chief Legal Officer

Q1 Results

Revenue for the first quarter of fiscal 2013 was $2.8 billion, down 33% from $4.2 billion in the previous quarter and down 43% from $4.9 billion in the same quarter of fiscal 2012. The revenue breakdown for the quarter was approximately 59% for hardware, 36% for service and 5% for software and other revenue. During the quarter, RIM shipped 7.8 million BlackBerry smartphones and approximately 260,000 BlackBerry PlayBook tablets.

GAAP net loss for the quarter was $518 million, or $0.99 per share diluted, compared with a GAAP net loss of $125 million, or $0.24 per share diluted, in the prior quarter and GAAP net income of $695 million, or $1.33 per share diluted, in the same quarter last year.

Adjusted net loss for the first quarter was $192 million, or $0.37 per share diluted. Adjusted net loss and adjusted diluted loss per share exclude the impact of pre-tax charges of $335 million ($326 million on an after tax basis), which are predominantly non-cash related to the impairment of goodwill. This charge and its related impact on GAAP net loss and diluted loss per share are summarized in the table below.

“Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively with all areas of the organization and the Board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the Company on areas that have the greatest opportunities,” said Thorsten Heins, President and CEO. “Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities.”

The total of cash, cash equivalents, short-term and long-term investments was $2.2 billion as of June 2, 2012, compared to $2.1 billion at the end of the previous quarter, an increase of approximately $100 million from the prior quarter. Cash flow from operations in Q1 was approximately $710 million. Uses of cash included intangible asset additions of approximately $285 million, capital expenditures of approximately $155 million and a business acquisition of approximately $100 million.


BlackBerry 10 Update

The successful launch of the BlackBerry 10 platform and the delivery of high quality, full-featured BlackBerry 10 smartphones remain the Company’s number one priority. Over the past several weeks, RIM’s software development teams have made major progress in the development of key features for the BlackBerry 10 platform; however, the integration of these features and the associated large volume of code into the platform has proven to be more time consuming than anticipated. As a result, the Company now expects to launch the first BlackBerry 10 smartphones in market in Q1 of calendar 2013.

“RIM’s development teams are relentlessly focussed on ensuring the quality and reliability of the platform and I will not compromise the product by delivering it before it is ready. I am confident that the first BlackBerry 10 smartphones will provide a ground-breaking next generation smartphone user experience,” said Thorsten Heins, President and CEO. “We are encouraged by the traction that the BlackBerry 10 platform is gaining with application developers and content partners following the successful BlackBerry Jam sessions that we have held around the world since the beginning of May. Similarly, the reception of the BlackBerry 10 platform by our key carrier partners has been very positive and they are looking forward to going to market with BlackBerry 10 smartphones in the first quarter of calendar 2013.”


Organizational Update

RIM today also announced the appointment of Steve Zipperstein, former General Counsel of Verizon Wireless, as its Chief Legal Officer. Prior to joining Verizon, Mr. Zipperstein previously served as Deputy General Counsel for GTE Corporation and was employed with the United States Department of Justice as a federal prosecutor. Mr. Zipperstein joins Kristian Tear, Chief Operating Officer and Frank Boulben, Chief Marketing Officer as the latest additions to RIM’s executive management team.


CORE Program

The Company announced its CORE (Cost Optimization and Resource Efficiency) program in March of this year. The program is focused on delivering operational savings through various initiatives, with financial objectives for the program targeted to drive at least $1 billion in savings by the end of fiscal 2013, based on RIM’s Q4 FY2012 run rate. As a result of the shift in BlackBerry 10 launch timeline, the increasingly competitive environment, as well as the identification of additional cost saving and efficiency opportunities, the Company may increase the scope and magnitude of these programs, and considers these original estimates as minimum numbers it will be pursuing.

To date, the Company has started implementing a number of these initiatives including:

  • a reduction in the number of layers of management to drive better clarity, efficiency and accountability across the organization;
  • the continued streamlining of our supply chain, which includes the consolidation of our manufacturing footprint from 10 external manufacturing sites to three, and working closely with our suppliers and other partners to identify ways to drive further efficiency;
  • outsourcing key parts of the Company’s Global Repair operations, including management of device level repairs;
  • targeted use of resources in our sales and marketing initiatives to more effectively leverage marketing windows and prioritize our marketing efforts and spend in regions that offer the highest opportunity and return;
  • further outsourcing of non-core functions as determined during the implementation of the CORE program; and
  • a global workforce reduction of approximately 5,000 employees, which is expected to be completed by the end of fiscal 2013.

The Company expects to incur restructuring related charges of approximately $350 million by the end of fiscal 2013, primarily associated with the global workforce reduction. Other charges and cash costs may occur during this process, and the Company intends to share more details throughout the year regarding its progress as programs are implemented or changes are completed.

Outlook

The Company expects the next several quarters to continue to be very challenging for its business based on the increasing competitive environment, lower handset volumes, potential financial and other impacts from the delay of BlackBerry 10, pressure to reduce RIM’s monthly infrastructure access fees, and the Company’s plans to continue to aggressively drive sales of BlackBerry 7 handheld devices. The Company expects to report an operating loss in the second quarter of fiscal 2013, as RIM continues to invest in marketing programs and continues to work through the transition to BlackBerry 10, as well as the Company’s fixed costs being allocated over a lower volume of shipments. This outlook excludes the impact of charges related to the CORE Program.

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BlackBerry Curve 9310 Launched By Boost Mobile

IRVINE, Calif.–(BUSINESS WIRE)–Boost Mobile, a leader in the no-contract wireless industry with award-winning service plans, will introduce another industry first, BBMUnlimited, which features worldwide unlimited access to BlackBerry® Messenger (BBM) and talk and text with payments that shrink to as low as $30 a month. Continuing the Boost Mobile trend of offering more choice, flexibility and value, this offer is available beginning on July 10 exclusively with the BlackBerry® Curve 9310 smartphone, which is launching the same day for $99.99 (excluding taxes).

BBM, available for all BlackBerry users worldwide, is one of the largest mobile social networks with more than 56 million active customers globally. Customers can experience real-time communications and easily chat with friends at the speed of now, with instant responses and “read” confirmations. Plus, BBM goes beyond chat with more than 1,000 BBM-connected apps available for download on BlackBerry App World. BBM-connected applications offer a social, interactive experience that’s not available on any other smartphone platform.

 

“We have partnered closely with RIM to enhance the Boost Mobile line-up and launch the first-ever no-contract BlackBerry smartphone priced under $100,” said Andre Smith, vice president-Boost Mobile. “This breakthrough device is matched with the most affordable BlackBerry service plan in the industry with shrinking payments and unlimited talk, text and worldwide BlackBerry Messenger.”

Similar to other monthly unlimited plans offered by Boost Mobile, the $45 BBM Unlimited plan provides customers the opportunity to be rewarded for simply making on-time payments. For every six on-time payments, customers will see their monthly payment shrink by $5, eventually getting down to as low as $30 a month for unlimited nationwide talk and text and worldwide BBM access. Payments do not need to be consecutive to qualify for these saving milestones.

BlackBerry Curve 9310 gives consumers the full power of the BlackBerry messaging and social-centric applications in the familiar BlackBerry Curve form factor. The smartphone will be available at Boost Mobile exclusive retail stores, select independent wireless dealer locations nationwide and at www.boostmobile.com with free shipping. It will also be available at select Best Buy locations next month.

Messaging on BlackBerry Curve 9310 is made easy with a full QWERTY keyboard and optical trackpad. In addition to real-time chat with BBM, customers can share large multimedia files (up to 6MB), including pictures, voice notes, calendar entries and locations. The smartphone is also Wi-Fi® enabled, giving users the opportunity to enjoy unlimited data. Key smartphone features include:

  • Dedicated BlackBerry Messenger key
  • Text and email (supports Yahoo!®, Gmail® and Hotmail®)
  • 3.2MP camera with flash
  • Speedy Web browsing
  • BlackBerry® 7.1 OS
  • Access to thousands of apps and games on BlackBerry App World™
  • Easy Access to Facebook®, MySpace™, Twitter®, YouTube® and more
  • Stereo Bluetooth® support
  • Wi-Fi and GPS1 enabled
  • Built-in FM radio
  • Great battery life (up to eight hours talk time or 18 days standby; up to 70 hours of music playback with headphones)

About Boost Mobile

Boost Mobile, one of Sprint’s prepaid brands and recently recognized by J.D. Power and Associates as “Highest Ranked in Purchase Experience Among Non-Contract Wireless Providers,” offers wireless phones and services with no long-term contracts. Boost Mobile redefines value for wireless consumers with its Monthly Unlimited with Shrinking Payments no-contract service, where the longer you stay the less you pay with on-time payments for unlimited voice, text messaging, Web, email and calls to 411. Boost Mobile offers nationwide service on the Nationwide Sprint Network, reaching more than 281 million people, and on the Nextel National Network, reaching more than 281 million people, with no activation or long-distance fees. Boost Mobile offers a selection of quality handsets from LG, Motorola, Research In Motion (RIM), Samsung, Sanyo and ZTE, ranging from entry-level to Android™ smartphone devices available nationwide at nearly 20,000 major retail stores, including Best Buy, RadioShack, Target, Family Dollar, Walgreens and Walmart, Sprint retail stores, independent wireless dealer locations, and on HSN, a leading TV home shopping network. Re-Boost® Cards are available at approximately 100,000 locations throughout the United States. Experience Boost Mobile on the Web at Facebook and Twitter; and purchase products at www.boostmobile.com.

The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited.

1 Service available with the $60 BlackBerry Monthly Unlimited Plan

Cellcrypt Mobile Baseline™ For BlackBerry® Has Received CESG CAPS Approval.

Press Release

LONDON, June 26, 2012 /PRNewswire via COMTEX/ — CAPS Approval allows UK Government departments to use Cellcrypt’s encrypted voice solution to meet their security needs up to Impact Level 3 / RESTRICTED

Cellcrypt ( http://www.cellcrypt.com ), a leading provider of encrypted voice calling on mobile phones, today announced that Cellcrypt Mobile Baseline™ for BlackBerry® has received CESG CAPS approval.

Cellcrypt Mobile Baseline™ for BlackBerry is certified at RESTRICTED/BASELINE grade that allows UK Government departments to meet their Baseline security needs.

CAPS (CESG Assisted Products Service) is a UK Cryptographic Evaluation Service run by CESG, the UK Government’s National Technical Authority for Information Assurance which provides policy and assistance on the security of communications and electronic data for central government departments and agencies, and the Armed Forces. CESG also helps protects the vital interests of the UK’s wider public sector, including law enforcement and local government, as well as the essential services that form the UK’s Critical National Infrastructure.

Cellcrypt Mobile Baseline™ is a smartphone software application that provides end-to-end voice call encryption on commercially available off-the-shelf BlackBerry smartphones for UK Government. It is an easy-to-use software application that makes secure calling as easy as making a normal mobile phone call and uses the IP data channel of mobile (2G, 3G, and 4G) networks.

Cellcrypt Mobile Baseline™ comprises a handset application and a back-end infrastructure. The BlackBerry smartphones have to be part of an IL3 deployment of the BlackBerry Enterprise Solution, also approved by CESG and configured as per the CESG Security Procedures.

“Cellcrypt is committed to protecting the communications of Government personnel. We are proud to provide our customers with a CESG-approved secure mobile voice solution which is currently the only solution available to UK Government officials who require an approved means of speaking about sensitive matters on their BlackBerry smartphones,” said Richard Greco, CEO of Cellcrypt.

“In addition to the CESG-approved BlackBerry data solution, Cellcrypt’s secure voice application for BlackBerry smartphones provides an important additional capability for our UK Government customers who rely on the BlackBerry solution to secure their communications,” said Stephen Bates, Managing Director for UK and Ireland, Research In Motion. “This is a strong application solution that is easy to deploy and is powerful enough to be certified to UK Government security standards.”

Cellcrypt Mobile Baseline™ is available immediately and can be demonstrated today.

About CAPS (CESG Assisted Products Service)

CAPS helps private sector companies to develop cryptographic products for use by Her Majesty’s Government (HMG) and other related organisations. CAPS links the cryptographic knowledge of CESG (the National Technical Authority for Information Assurance) with the private sector’s expertise and resources.

CAPS is a service for companies interested in commercial risk developments for the UK government market, which provides access to CESG’s knowledge, skills and experience in the field of Information Assurance, supplemented by a range of guidance documentation. CAPS vendors may incorporate appropriate CESG cryptographic or public domain algorithms in their products and submit them for evaluation by CESG. When approved, these products may be advertised as suitable for purchase by Her Majesty’s Government (HMG) as well as the UK public sector.

For more information please visit: http://www.cesg.gov.uk/servicecatalogue/CAPS/Pages/CAPS.aspx .

About Cellcrypt

Cellcrypt is a leading provider of encrypted voice calling on commercial off-the-shelf mobile phones including BlackBerry®, Android™, iPhone® and Nokia® smartphones. It enables secure, interoperable calling between a broad selection of popular mobile phones, and interfaces to office phone systems (PBXs) that connect to landlines as well as securely accesses standard PBX features such as voicemail, conference calling and calling out to the public phone network.

Various other Cellcrypt technology components have information assurance validations from other governments including FIPS 140-2 standard approved by the US National Institute of Standards & Technology (NIST). Cellcrypt Mobile products operate over data-enabled networks including 2G (GPRS/EDGE), 3G (HSPA, CDMA/EV-DO) and Wi-Fi™. Cellcrypt is a BlackBerry® Alliance Partner, Inmarsat Connect Partner, and has AT&T Mobility Data Certification.

Today, Cellcrypt solutions are used routinely by governments, global enterprises and their senior-level executives worldwide. Cellcrypt is a UK-based privately-held, venture-backed company with offices in the UK, USA, and Middle East.

For more information please visit: http://www.cellcrypt.com .

The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited. RIM assumes no obligations or liability and makes no representation, warranty, endorsement or guarantee in relation to any aspect of any third party products or services. All other trademarks are the property of their respective owners.

Celestica Slowing Down BlackBerry Hardware Manufacturing

TORONTO, Canada – Celestica Inc. (NYSE, TSX: CLS), a global leader in the delivery of end-to-end product lifecycle solutions, today announced that over the course of the next three to six months, it will wind down its manufacturing services for Research in Motion (RIM).

Celestica has been a high-performing manufacturing supplier for RIM and will work closely with RIM throughout the transition. As discussed on the company’s first quarter results conference call on April 24, Celestica has been working with RIM as it assesses its supply chain strategy. Celestica estimates that prior to any recoveries, its restructuring charges will not exceed $35 million.

More details about this announcement will be provided as part of the company’s second-quarter results press release and conference call, which are scheduled for Friday, July 27.

In addition, Celestica is reaffirming its second quarter financial guidance that was provided on April 24. The company anticipates revenue to be in the range of $1.65 billion to $1.75 billion, and adjusted net earnings per share to be in the range of $0.20 to $0.26.

Porsche Design P’9981 Released In Canada

Stuttgart/Waterloo – Porsche Design and Research In Motion (NASDAQ: RIMM; TSX: RIM) today launched the elite new Porsche Design P’9981 smartphone from BlackBerry® in Canada. The Porsche Design P’9981 smartphone from BlackBerry is now available at the new Porsche Design store in Yorkville Toronto at a retail price of $1890.

Instantly identifiable as a Porsche Design product, the exclusive material choices for this unique smartphone include a forged stainless steel frame, hand-wrapped leather back cover, sculpted QWERTY keyboard, and crystal clear touch display. The customized Porsche Design P’9981 comes with an exclusive Porsche Design UI and a bespoke Wikitude World Browser augmented reality app experience. The handset also includes a premium, exclusive PIN that easily identifies the customer as a holder of a Porsche Design P’9981 smartphone from BlackBerry.

“Porsche Design has been a symbol for Iconic Style since 1972. And the brand new P’9981 smartphone is a milestone product for Porsche Design,” said Dr. Juergen Gessler, CEO of the Porsche Design Group. “It is a representation of the iconic Porsche Design styling philosophy and RIM’s technology-driven focus, which combine to deliver engineered luxury and powered performance in a smartphone for the discerning consumer.”

“This collaboration stems from a shared belief that form equals function,” said Todd Wood, SVP for Industrial Design, Research In Motion. “The Porsche Design P’9981 is a truly modern luxury smartphone, where the timeless style of Porsche Design meets the unmatched mobile experience provided by BlackBerry.”

Powerful hardware and software
The Porsche Design P’9981 is built on a performance driven platform that features a 1.2 GHz processor and Liquid Graphics™ technology, which enables a highly responsive touch experience with incredibly fast and smooth graphics. It also features HD video recording, 24-bit high resolution graphics, advanced sensors enabling new augmented reality applications, and built-in support for NFC (Near Field Communications). It comes with 8 GB of on-board memory, expandable to up to 40 GB with a microSD card.

BlackBerry® 7, the operating system for the new Porsche Design P’9981, delivers a highly refined and integrated suite of phone, email, messaging and social apps. It includes a next generation BlackBerry® browser, which provides a fast, fluid web browsing experience that is among the best in the industry, and comes with a number of pre-loaded applications that keep customers connected and productive throughout the day.

For more information please visit http://ca.blackberry.com/smartphones/p9981/.

About Porsche Design
Porsche Design is a luxury brand with a special focus on products that are technically inspired. The brand Porsche Design was founded in 1972 by Professor Ferdinand Alexander Porsche. The products are the embodiment of functionality, timelessness and purist design. They impress by the technical innovations they incorporate. The product portfolio includes watches, sunglasses, luggage, electronic products, a line of fragrances for men as well as a sport and fashion collection. All products of the brand are designed at the Porsche Design Studio in Zell am See, Austria, and are sold worldwide in the brand’s own stores, in franchise stores, shop-in-shops, quality department stores and exclusive retailers.

About Research In Motion
Research In Motion (RIM), a global leader in wireless innovation, revolutionized the mobile industry with the introduction of the BlackBerry® solution in 1999. Today, BlackBerry products and services are used by millions of customers around the world to stay connected to the people and content that matter most throughout their day. Founded in 1984 and based in Waterloo, Ontario, RIM operates offices in North America, Europe, Asia Pacific and Latin America. RIM is listed on the NASDAQ Stock Market (NASDAQ: RIMM) and the Toronto Stock Exchange (TSX: RIM).

Forward-looking statements in this news release are made pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws. When used herein, words such as “expect”, “anticipate”, “estimate”,  “may”,  “will”, “should”, “intend,” “believe”, and similar expressions, are intended to identify forward-looking statements. Forward-looking statements are based on estimates and assumptions made by RIM in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that RIM believes are appropriate in the circumstances. Many factors could cause RIM’s actual results, performance or achievements to differ materially from those expressed or implied by the forward-looking statements, including those described in the “Risk Factors” section of RIM’s Annual Information Form, which is included in its Annual Report on Form 40-F (copies of which filings may be obtained at www.sedar.com or www.sec.gov). These factors should be considered carefully, and readers should not place undue reliance on RIM’s forward-looking statements. RIM has no intention and undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
The BlackBerry and RIM families of related marks, images and symbols are the exclusive properties and trademarks of Research In Motion Limited. RIM, Research In Motion and BlackBerry are registered with the U.S. Patent and Trademark Office and may be pending or registered in other countries. All other brands, product names, company names, trademarks and service marks are the properties of their respective owners. RIM assumes no obligations or liability and makes no representation, warranty, endorsement or guarantee in relation to any aspect of any third party products or services.

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