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Loss-making BlackBerry manufacturer weighs options
31/05/2012 - BlackBerry-maker Research in Motion has hired a team of bankers to help it weigh its options as its business erodes in the face of an exodus to the iPhone and Android smartphones.
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RIM issued a dire warning about its business on Tuesday, saying it is losing money for the second-consecutive quarter and will lay off a "significant" number of employees.
The company based in Waterloo, Ontario said it has hired JP Morgan and RBC Capital Markets to help it evaluate its options. Those including partnering with other companies, licensing software and overhauling its business, it said.
RIM made no mention of selling of the company. But new Chief Executive Thorsten Heins did not rule that out after RIM's last earnings report in late March.
Colin Gillis, an analyst with BGC Financial, said the company is in a downward slide that's not slowing. He said he doesn't see any buyers for RIM coming forward soon.
"Unfortunately, it falls into the too little, too late category," Gillis said.
"It doesn't mean somebody won't try it. It doesn't mean it's going to be a saviour for the company either."
The statement from RIM did not detail the coming layoffs, other than to say the company expects "significant spending reductions and headcount reductions in some areas throughout the remainder of the year."
Jefferies analyst Peter Misek said he expects RIM to announce as many as 5,000 layoffs soon. The company has about 16,500 employees now after cutting 2,000 jobs in July.
RIM said the company looks to save $1 billion - even as it transitions to its much-delayed "BlackBerry 10" software platform expected out later this year.
The company that pioneered the smartphone market with its BlackBerry phones is facing the most difficult period in its history. RIM's US share of smartphones dropped from 44 per cent in 2009 to 10 per cent in 2011, according to market researcher NPD Group.
It still has 78 million active subscribers across the globe, but Apple Inc's iPhone and smartphones from companies including Samsung and HTC that use Google Inc's Android software are gobbling up market share.
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