Research in Motion wrote off $485 million worth of PlayBooks that it was unable to sell, as net income and revenue both fell significantly from a year ago.
Both Jim Balsillie and Mike Lazaridis, the company's co-chief executive officers, said that they asked the company's compensation committee to reduce their respective salaries to just a dollar, even as a cross-management team works to cut costs. Balsillie said that the decision had been made because of a perception that the company's management had "fallen short" of expectations.
In all, RIM reported a number of future disappointments, even as the company's top line continued in the black, thanks to its success overseas. RIM was profitable, even through net income fell to $265 million from $911 million a year ago. Revenue fell 5 percent from the same period, from $5.5 billion to $5.2 billion.
"We ask for your patience and confidence and hope to report further progress in the coming quarters," Lazaridis said in a conference call with analysts.
At this week's BlackBerry World trade show, everyone expected the top headliner to be the company's just-released PlayBook tablet and its new software offerings. As it turned out, the gadget ended up taking second spot to a surprise guest: Microsoft boss Steve Ballmer.
Ballmer came out during RIM co-CEO Mike Lazaridis' keynote yesterday morning to announce a partnership that would bring Microsoft's Bing search engine to BlackBerries. Search is a big deal in mobile devices, so it's fitting that a heavy hitter from Microsoft came to give its blessing, but many took the appearance of the CEO as a clear sign of bigger things to come.
Does RIM know what it's in for, though? There's considerable doubt over whether the company's strategy and platforms can be successful over the next couple of years. If they're not, Microsoft could end up owning RIM.
"Will Microsoft buy RIM? That is a possibility and a fast track for Microsoft to gain a foothold in the mobile hardware business," says Harry Wang, director of mobile research at Parks Associates. "RIM's market capitalization is only $25 billion and Microsoft has $48 billion in cash. If RIM's value drops to $15 billion, it will become an attractive target for Microsoft. Maybe Steve Ballmer was planting that seed during his keynote appearance at Blackberry World."