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June 30, 2013

RIM posts larger-than-expected loss, shares plunge

(Continued)

TORONTO —

Chief Executive Thorsten Heins said on a conference call with analysts that the "transition takes time" and noted things are better compared to last year when "we were told the company was finished."

Shares of Research in Motion Ltd. dropped $4.02, or 28 percent, to close at $10.46 Friday.

The BlackBerry, introduced in 1999, was once the dominant smartphone for on-the-go business people. But it lost its cachet not long after Apple released the first iPhone in 2007. Apple's device reset expectations for what a smartphone can do. RIM promised to catch up while developing new a software system called BlackBerry 10, which uses technology it got through its 2010 purchase of QNX Software Systems. But the company took more than two years to unveil new phones that were redesigned for the multimedia, Internet browsing and apps experience that customers now demand. During that time, RIM cut more than 5,000 jobs and saw shareholder wealth of more than $70 billion vanish.

The Canadian company said it lost $84 million, or 16 cents a share, in the three months ended June 1 on revenue of $3.1 billion. It lost $518 million, or 99 cents per share, on revenue of $2.8 billion a year ago.

Analysts expected RIM to earn 5 cents a share on revenue of $3.37 billion.

The number of BlackBerry users in the world also fell by four million to 72 million. RIM also said it anticipates it will generate an operating loss in the second quarter. Heins noted the highly competitive smartphone market makes it difficult to estimate revenue and levels of profitability.

Heins also announced on the call that he has halted further development of RIM's failed tablet offering, the Playbook. The Playbook has not sold well.

"Our teams have spent a great deal of time and energy looking at solutions that could move the BlackBerry 10 experience to Playbook, but unfortunately I am not satisfied with the level of performance and user experience and I made the difficult decision to stop these efforts and focus on our core hardware portfolio," Heins said.

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