BlackBerry loses $54 million during network outage days

Research In
Motion (RIM), makers of BlackBerry smartphones, has pegged $54 million as the
service revenue loss due to 48-hour outage in Q3 2011.

During the
third quarter of fiscal 2012, the company experienced a service interruption which
resulted in the loss of service revenue and the payment of service credits in
the quarter totaling approximately $54 million, $40 million after tax, related
to the interruption in the availability of the company’s network, RIM said in
its Q3 financial statement.

During Q3 2011,
RIM shipped approximately 14.1 million BlackBerry smartphones and approximately
150,000 BlackBerry PlayBook tablets.

Despite the
challenges faced in the third quarter, the BlackBerry subscriber base grew to
almost 75 million customers around the world. In addition, RIM launched a range
of new BlackBerry 7 based smartphones globally and introduced holiday
promotions that helped drive growth in the installed base of BlackBerry
PlayBook users.

The recent
network outage and weak demand has prompted RIM to announce a poor outlook for
Q4. Revenue for the fourth quarter of fiscal 2012 ending March 3, 2012 is
expected to be in the range of $4.6-$4.9 billion. BlackBerry smartphone
shipments are expected to be between 11 million and 12 million units. Gross
margin percentage for the fourth quarter is expected to be approximately 38
percent. Earnings per share for the fourth quarter is expected to be in the
range of $0.80-$0.95.

continues to have strong technology, unique service capabilities and a large
installed base of customers, and we are more determined than ever to capitalize
on our strengths to overcome the recent execution challenges surrounding
product launches and the resulting financial performance,” said Jim Balsillie
and Mike Lazaridis, Co-CEOs at Research In Motion.

As part of our
commitment to improving our performance to better meet the expectations of
shareholders and customers, we continue to evaluate ways to improve in several
areas of the Company’s operations. It may take some time to realize the
benefits of these efforts and the platform transition that we are undertaking,
but we continue to believe that RIM has the right set of strengths and
capabilities to maintain a leading role in the mobile communications industry,”
Co-CEOs said in a statement.

By Team
[email protected]