Research in Motion shares were hit hard in early trading Friday after reporting dismal earnings results and another delay in its release of the BlackBerry 10 operating system.
RIM shares stumbled $1.92 to $7.54 on the Toronto Stock Exchange by noon, or 20.4 per cent.
The Waterloo, Ont.-based company also said it was cutting 5,000 jobs â one-third of its workforce â to control costs as it pushes ahead with a revamp of its BlackBerry operating system.
The announcements dealt another stiff blow to RIM after it insisted the new smartphone system would be released this fall.
âI am absolutely amazed that RIM hasnât been able to execute on this,â technology expert Carmi Levy told CTVâs Canada AM Friday.
âYou donât have the luxury of time at this point . . . whatever (research and development) and engineering research that youâve got, throw them into the mix and get this thing out the door,â Levy said in an interview from London, Ont.
The longer it takes for the product to hit consumers and be available on retail shelves, the more life that will flow out of the BlackBerry brand, Levy said.
âIt just doesnât have time anymore, itâs got to move and move quick,â he said.
RIMâs stock tumbled in after-hours trading Thursday in New York.
The company, which reports in U.S. dollars, posted a loss of US$518 million or 99 cents per share for its latest quarter, steeply missing analyst expectations.
The results marked a decline from the profit of $695 million or $1.33 per share a year ago.
âPeople are just throwing in the towel and saying, âThatâs it,ââ Colin Cieszynski, a CMC Markets analyst, said of investors. âA lot of people are just giving up at this point.â
Chief executive Thorsten Heins told analysts on a conference call that he expects the company will face further pressure on its financial results over the next several quarters.
Levy said recent failures at RIM canât be blamed on Heins, calling him the âright guy for the job at the right time.â
âUnfortunately for him, he inherited a bit of a mess and heâs doing the best that he can,â he said.
âIf we had another leadership change at this point, what it would do is throw more fuel on the fire, more turmoil on a company that really canât afford it at this time.â
The new BlackBerry 10 operating system and phones have widely been considered a last-ditch effort to save the company.
Levy said that while thereâs a âlegion of BlackBerry fans out there who will probably buy BlackBerries until theyâre pried from their cold, dead hands,â most of the market has moved on to devices like Appleâs iPhone.
And, itâs unlikely RIM can come back from the brink like Apple did when its late CEO Steve Jobs launched products like the iMac, iPod and iPhone, he said.
âWe donât see any of that in RIMâs future. We see BlackBerry 10, which sort of keeps getting pushed back and pushed back,â he said.
While there are some parallels between the two companies, âthe ingredients for recovery simply arenât there in RIMâs case,â Levy said.
He also believes the 5,000 job cuts arenât the end of downsizing for the company.
âI think 5,000 is just the start of it. The companyâs been blowing people off left, right and centre under the radar and I think thatâs going to continue,â Levy said.
âThe company is going to be a lot smaller, itâs selling a lot fewer devices and itâs burning through cash at its current size and it needs to be right-sized for a much smaller future.â
While other companies such as Motorola and Nokia have in the past fallen behind their competitors, Cieszynski told Âéśš´ŤĂ˝ Channel on Friday, âfor Research in Motion, itâs going to be harder and harder for them to climb back up and gain back the ground that theyâve lost.â
Although the company has a strategic review underway to consider such possibilities as partnerships or the sale of the company, he said, itâs more difficult for RIM to get a reasonable price as it lags farther and farther behind competitors.
Cieszynski also said there are âlots of rumours going aroundâ regarding the structure of the company, but suggested it was too early for a clear prognosis.
âThe street always wants things done right now, and sometimes these reviewsâŚcan take a few months for people to go through and sort out all of the options,â he said.