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BlackBerry maker hints at consumer market withdrawal

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Blackberry users chat with their blackberry at Cafe Vendor In Jakarta, Indonesia

© Rex Features / KeystoneUSA-ZUMA

BlackBerry manufacturer Research In Motion has suggested that it will withdraw from the consumer market after reporting a heavy loss in the first quarter of 2012.

The Canadian company endured a net loss of $125m (£78m) in the three months to March 3, compared to a profit of $934m a year earlier.

Jim Balsillie, who stepped down as co-chief executive of RIM earlier in the year, has also announced his resignation as a director of the company's board.

RIM chief technology officer David Yach will retire from his role after 13 years with the company, and chief operations officer of global operations Jim Rowan will leave to "pursue other interests". RIM has decided to hire a single COO with responsibilities to run the company's entire operations.

Shares in RIM tumbled as much as 9% in after hours trading following the statement yesterday. The stock price has fallen by more than 80% over the past year after a series of troubles for the once dominant maker of smartphones.

Shipments of BlackBerry smartphones slumped to 11.1m over the three months, down 21% from the same period in 2011. Shipments of the PlayBook tablet hit close to 500,000, but that was mostly down to a massive price cut for the struggling product.

For the full financial year, RIM made a net profit of $1.2bn, but that was down from $3.4bn in the previous year.

RIM saw its previously imperious service record shattered last year when a three-day outage in October left millions of customers without internet, email and messaging.

But the company's biggest problems have come in losing ground to rivals in the smartphone market, particularly Apple's iPhone and devices running Google Android.

Thorsten Heins, who was appointed president and chief executive of RIM after Balsillie and RIM co-founder Mike Lazaridis stepped down, said that the company would now focus on its areas of strength - corporate customers.

Heins said that he has identified many areas of strength in the business, and is very excited about the launch of the new BlackBerry 10 operating platform in the latter part of 2012.

But despite the free BlackBerry Messenger (BBM) service being popular with teenagers, Heins said that BlackBerry cannot be "everybody's darling and all things to all people", and so the brand would "refocus on the enterprise business and capitalise on our leading position in this segment".

"Notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant and I am taking the necessary steps to address them," he said.

"In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM's key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives including increased management accountability and process discipline."

Heins also said that he would undertake a comprehensive review of strategic opportunities, including "partnerships and joint ventures", suggesting that RIM will look to licence BlackBerry 10 to other device makers, including potentially Amazon.

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