OTTAWA: Research in Motion unexpectedly announced that a new line of phones that it still hopes will revive its BlackBerry brand will be delayed until next year.
It is a critical setback for RIM, which is struggling to compete with old phone technology in a highly competitive market. After losing dominance of the smart-phone market to Apple’s iPhone and phones using Google’s Android operating system, RIM has staked its future on the BlackBerry 10 line of phones. But the company had previously encountered delays in its release date, which along with other issues resulted in its co-chief executives giving up management of the company in January.
The latest setback, which was announced Thursday along with a $518 million loss in the company’s first quarter, increased doubts among analysts and investors about RIM’s future.
The company also announced that it would cut about 5,000 of its 16,500 employees, raising additional concerns that a drop in morale and defections by employees working on BlackBerry 10 could lead to further delays.
“I don’t know if they can turn it around,” said Ehud Gelblum, an analyst with Morgan Stanley. “I’d love to see it but there are some cases that are lost causes.”
Charles Golvin, an analyst with Forrester Research, said that the delay meant that the BlackBerry 10 phones would arrive after the anticipated release of a new iPhone, more phones based on the Windows 8 operating system from Microsoft as well as updated Android phones. That, he said, will make it extremely difficult for RIM to generate interest in its new line.
Thorsten Heins, who became RIM’s chief executive in January, said the delay was not related to any problems with the technology of the new phones. Instead, he said the company was overwhelmed by the sheer amount of software code it was now handling.
He did not explain why that management issue was not apparent earlier this year. RIM has a long history of missing deadlines and releasing products before they are fully finished.