BlackBerry maker Research In Motion (RIMM) continues to struggle in the tablet market, posting some pretty painful second-quarter earnings information today that shows it has only shipped about 500,000 BlackBerry PlayBook tablets so far.
According to a story from Mashable, RIM’s revenue has risen 16 percent from Q1 2011, but its net income has declined. In addition to the 500,000 PlayBooks the company shipped (no word on what it has actually sold), it also moved 13.2 million other BlackBerry devices.
RIM has had some trouble keeping up with the mobile market ever since Apple (AAPL) joined the scene and shifted the smartphone focus away from the sort of business uses that BlackBerry excelled at – email on the go, for example, and staying connected to the audience – toward the mobile app space that has developed in the last few years. BlackBerry’s portion of the smartphone has been declining pretty steadily since that time (although it has leveled-off a bit recently), and as the PlayBook sales numbers show, RIM’s entry into the tablet market isn’t going extremely well, either.
The PlayBook seemed like it might have an edge on other tablets as it was being developed. RIM included software that allowed the tab to emulate the Android experience and thereby run apps from Google’s mobile operating system, expanding RIM’s app offering for the PlayBook by piggybacking on the Android Market. The company also acquired The Astonishing Tribe to help develop its user interface and experience with the PlayBook in order to make it more competitive. But it seems the PlayBook is still struggling to find an audience.
Here’s a quote from Mashable’s story from RIM co-CEO Jim Basillie:
“Fiscal 2012 has gotten off to a challenging start. The slowdown we saw in the first quarter is continuing into Q2, and delays in new product introductions into the very late part of August is leading to a lower than expected outlook in the second quarter. RIM’s business is profitable and remains solid overall with growing market share in numerous markets around the world and a strong balance sheet with almost $3 billion in cash. We believe that with the new products scheduled for launch in the next few months and realigning our cost structure, RIM will see strong profit growth in the latter part of fiscal 2012.”
So changes are on the horizon, both with RIM bringing new products and with it making some “realignments” going forward. That seems likely to mean layoffs and other cost-cutting maneuvers, as well as a scaled-down reassessment of the RIM’s expected financial outlook for the rest of the year.
Expectations for the PlayBook seemed high after it launched to 50,000 sales on its first day on shelves, which was better than both the Motorola (MMI) Xoom’s and the Samsung (005930.KS) Galaxy Tab’s launches. But after nearly two full months on shelves, it appears sales have slowed and the PlayBook joins the ranks of other tablets that can’t stand up to the iPad.
We’ll have to wait to see what strategies RIM might come up with to try to get the PlayBook back on track.