29.06.2012

TORONTO (Reuters) - Research In Motion Ltd delayed the make-or-break launch of its next-generation BlackBerry phones until next year, in a devastating setback to the once-dominant technology company whose sales are crumbling.

Shares of the company, which also announced a steeper-than-expected quarterly operating loss and deep job cuts on Thursday, plunged 14 percent after it said it would release its revamped BlackBerry 10 devices early in 2013. It conceded the development had "proven to be more time-consuming than anticipated."

The delay in releasing the devices - RIM's last best hope of stemming its eclipse at the hands of Apple Inc's iPhone and phones using Google Inc's Android software - confirmed the worst fears of analysts and investors.



The size of the loss, RIM's first in eight years, and the likelihood that sales will keep sliding into 2013, severely reduce the options for the company if it is to survive.

RIM's announcement that it would slash 5,000 jobs, or 30 percent of its workforce, only reinforced the impression of a company that could be in terminal decline.

RIM, which virtually invented mobile email, has fallen from a leadership position to an also-ran in smartphones over a few years filled with delayed and uninspiring products, service outages and other embarrassments.

RIM's board is under mounting pressure to consider unpalatable options such as selling its network business or forming an alliance with Microsoft, sources familiar with the situation told Reuters.

Microsoft CEO Steve Ballmer approached RIM earlier this year looking to strike a partnership similar to the one the software giant has with Nokia Oyj, the sources said. Under that partnership, Nokia will use Microsoft's latest Windows operating system on its smartphones.

In such a scenario, RIM could also look for Microsoft to buy a stake in the company and fund marketing and other expenses, the sources said. However, this option is not attractive to RIM because it would mean the end of the Waterloo, Ontario-based company's technology independence, they said.

Even so, freshman CEO Thorsten Heins gave no indication on a Thursday conference call that he was losing faith in the current tack of cutting costs while waiting for the BlackBerry 10 launch, which is now more than a year overdue. The new devices are now set to land in a slow period when consumers are tapped out after their holiday spending.

"It's akin to launching fireworks underwater," said IDC analyst Kevin Restivo. -Reuters