Canada-based Research in Motion Limited’s future looks grim with its latest Z10 smartphone based on the new BB10 platform failing to impress. As a result, the company continues to slash the smartphone’s rate.
In Mar 2013, the new handset was launched in the U.S., priced at $199 in both AT&T, Inc. (T - Free Report) and Verizon Wireless stores. However, lackluster demand for Z10 has forced these carriers to reduce the price by almost 50% to $99 with a two-year contract.
Large retail players like Best Buy Co., Inc. (BBY - Free Report) and Amazon.com Inc. (AMZN - Free Report) are also selling Z10 at a reduced price of $49 (inclusive of contract). Presently, Z10 is priced at $700 without any contract terms.
Last month, Research In Motion reported dismal first-quarter 2014 financial results with both the top and the bottom lines missing the Zacks Consensus Estimate. The company sold nearly 6.8 million BlackBerry smartphones and 100,000 BlackBerry Playbook tablets as compared with 7.8 million BlackBerry devices and 260,000 tablets in the prior-year quarter. However, the company sold only 2.7 million BB10-based smartphones during the quarter.
Once a major player in the smartphone market, Research In Motion, is now losing market traction to Apple Inc.’s iOS and Google Inc.’s Android operating systems. The company’s inability to upgrade its operating platform has led to the loss, especially in North America and Europe.
Hence, we believe that reducing the handset prices, launching the Q10 smartphone and slashing workforce will have little impact on Research In Motion’s top and bottom line growth.
Currently, Research In Motion carries a Zacks Rank #3 (Hold).
Research In Motion announced that effective January 30, 2013, the company would operate around the world under the name BlackBerry. From February 4, 2013, the company’s ticker symbol for trading has been changed from “RIMM” to “BBRY” on NASDAQ. The legal name of the company has not changed, for which the approval of the official change by shareholders will be sought at the company's Annual General Meeting later in 2013. During the time, the company will do business as BlackBerry.