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RIM abandons consumer market, as the bad news keeps coming

RIM's quarterly earnings announcement has revealed quite a few juicy bits of information today - but perhaps the most extraordinary of all is the news that the company is effectively withdrawing from the consumer device market.   

CEO Thorsten Heins told investors that the company will no longer try to be "all things to all people", and going forward it will now focus exclusively on developing products and services for business and enterprise.

This change in strategy comes just a few weeks ahead of the first glimpse of the new BlackBerry 10 operating system, with developers soon being given preview devices - although our best understanding is that this won't be BB10 in its truest sense, but rather a reworked version of the PlayBook's QNX OS, which developers will be able to use to create apps for the company's new smartphone platform.

Along with revealing how many PlayBooks and BlackBerry handsets it shipped last quarter, a few other details also emerged:

  • Quarterly revenues fell 19% on the previous quarter to $4.2bn (down 25 year on year)
  • GAAP net loss of $125m for the quarter
  • Former co-CEO Jim Balsillie has now resigned from the board of directors
  • The company's chief operations officer, Jim Rowan, and chief technology officer, David Yach, will also be leaving the company

So where does all this leave RIM? There's no sugar-coating it: the company seems to be in a fairly desperate state. The financial figures paint a sorry picture to say the least - after last year's share price freefall, there's been no real sign of improvement, with the value of the company's stock still remaining well below its book value.

Meanwhile, its customers are clearly deserting the platform in droves, and key executives are also leaving the company as it prepares to finally release its much-delayed next-generation operating system. Even its chief executive admits that the company's new plan - abandoning its failed efforts in the consumer space to focus solely on business - offers "no guarantee of success".

But however grim things are looking right now, it's also clear that some pretty big decisions are being made at Research In Motion, and this might be an indication that RIM is finally on the right track, making realistic choices based around the company's strengths, rather than chasing unrealistic dreams.

Will RIM's plan work? Is the company making the right decision here by ceding the consumer space, and focusing solely on business? Do you think they'll be able to deliver their next-generation BB10 products on time? Let us know your thoughts in the comments below.

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