- Associated Press - Thursday, June 16, 2011

TORONTO (AP) - BlackBerry maker Research In Motion Ltd.’s quarterly results on Thursday provided fresh evidence of the company’s struggles to come up with a device to compete with the iPhone and smartphones running Google’s Android operating system.

The Waterloo, Ontario, company reported a nearly 10 percent drop in its fiscal first-quarter net income.

RIM also said it has been hurt by product delays, announced layoffs and warned that its profit for the current quarter and full fiscal year would come in well below Wall Street’s expectations.

It was the second time this year the company has pared back its profit outlook. Its stock fell more than 14 percent in extended trading.

“The existing portfolio of BlackBerry products has been in market for close to a year, and delivering new products has proven more challenging than anticipated,” RIM Co-CEO Jim Balsillie said on a conference call with analysts.

The announcements are the latest signs of trouble for RIM. The company dominated the corporate smartphone market and has sought to expand its appeal to consumers, but has recently had trouble with consumers because the phones aren’t perceived to be as sexy as its chief competitors.

BlackBerrys are known for their security and reliability as email devices, but they haven’t kept pace with Apple Inc.’s iPhones or phones based on Google Inc.’s Android software when it comes to running third-party applications.

Balsillie also acknowledged that the April launch of the company’s tablet computer could have gone better. RIM got poor reviews on the Playbook and about 1,000 of the devices had to be recalled because of defective software. The company said it shipped about 500,000 of the tablets in its fiscal first quarter.

“The PlayBook launch did not go as smoothly as we had planned,” he said.

Co-CEO Mike Lazaridis made a rare appearance on the conference call as the two defended the business and their role as co-CEOs. RIM has an unusual leadership structure, where two executives, Balsillie and Lazaridis, serve as both co-CEOs and co-chairmen. Dissident shareholders are calling for RIM to separate the roles of CEO and chairman.

Some industry analysts believe RIM is following the same trajectory as Finish handset maker Nokia, which last month warned that its second-quarter sales and margins are expected to be much lower than anticipated because of the competition on devices in both the high- and low-end market.

“We have a strong business,” Lazaridis said. “We have made major platform upgrades, and we are almost through this transition.”

Lazaridis said RIM was already far along in developing its next-generation BlackBerrys when it realized that U.S. customers wanted higher performance, requiring the company to upgrade the chips used. That posed an engineering challenge and delayed products, he said.

For the three months that ended May 28, RIM earned $695 million, or $1.33 per share. That’s down from $769 million, or $1.38 per share, a year ago.

Revenue for the fiscal first quarter rose 16 percent to $4.9 billion from $4.2 billion.

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