RIM wagers on Blackberry 10’s prevalence in Africa as it reports quarterly loss

Research in Motion (RIM), Canada-based manufacturer of Blackberry smartphones, has posted a little less than expected quarterly loss, sending its shares up to just about 18 percent in after-hours sales.

The company reported a net loss of about US$235 million for the second quarter ending September 1, compared with the $329 million profit it made in the same period last year. Ruling out one-time restricting items, the loss was US$142 million.

The struggling company saw its revenue increase from nearly $2.2 billion to about $2.3billion, even as the launch of its next-generation devices draws closer. Some experts hold that RIM’s capacity to dip into a cash reserve could be critical for a successful launch of its brand of revamped smartphones set to run on its new Blackberry 10 (on BB10) operating system.

RIM’s Q2 2013 financial report released sparks optimism ahead of the launch of its flagship brand of next-generation smartphones. Analysts have expressed that the Blackberry maker’s future will depend on the uptake of BB10, which features a flashy user interface with 3D effects, and is designed to make it easier for developers to port Android apps “to help bolster the amount of software available on the touchscreen phones it will power.”

According to the company, the system was initially intended for release by March this year, but was rescheduled for early next year. Meanwhile, it casts a shadow over RIM’s current line-up, bearing in mind the system is largely incompatible with the firm’s existing models. The company however says it now has 80 million BlackBerry subscribers and is still bent on launching its BlackBerry 10 platform in the first quarter of next year.

RIM”s fortunes have failed at the expense of rivals including Apple and Samsung who currently dominate the market share. In its efforts to make a comeback, RIM has concentrated its focus on Africa where it maintains a significant market share.

RIM seems to have wagered its future on the BB10 in Africa, which showed aggressive mobile phone penetration in the last one decade, with BlackBerry continuing to perform well even as it loses its grip on market share across the rest of the world.

Earlier reports indicate South Africa and Nigeria will be among the first wave of countries to receive the BB10.

RIM’s chief executive Thorsten Heins said: “Despite the significant changes we are implementing across the organization, our second quarter results demonstrate that RIM is progressing on its financial and operational commitments during this major transition.”

Nigeria’s smartphone penetration is just 5 percent, but with RIM, the number one brand in the country with half the market, it stands to benefit from the smartphone rollout. RIM says that brand momentum is growing in Nigeria.

In South Africa, RIM says mobile users are loyal to BlackBerry, topping the list of smartphone providers, mainly on the back of its popular instant messaging service BBM.

“BBM penetration in South Africa is among the highest in the world with 98 percent of the local BlackBerry user base using BBM. It is the most downloaded free app from BlackBerry App World in South Africa,” Bose said.

Bose explained the trick of BlackBerry’s success in Africa: “We focus on direct engagement with the youth through campus events, campus ambassadors, secret gigs, extensive advertising, and competitions such as the recent ‘Touch Awesomeness’ campaign.”

The Canadian company is also staking on a number of its tablets. Low uptake of the Blackberry Playbook may further indicate a bad omen as the tablet runs on the QNX system on which Blackberry 10 is based.

The company shipped close to 7.4 million Blackberry phones in the quarter and 130,000 BlackBerry PlayBook tablets.

With Apple’s iOS 6, Microsoft’s Windows Phone 8 and Google’s Android 4.1 all due for release before Blackberry 10 emerges, the battle ahead is only getting harder.

Shares in RIM have fallen in the neighbourhood of 70 percent over the past year.

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