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March 30, 2012

Three-Day Outage Costs RIM $54 Million

By Joe Eitel, TMCnet Contributing Writer

Research in Motion (RIM), maker of the BlackBerry (News - Alert), released its fourth quarter and yearly financial reports for fiscal 2012, and a three-day service outage cost the company $54 million. After taxes, the outage netted the company a $40 million loss.



The Business Insider is reporting BlackBerry customers demanded to be reimbursed for the outage. The three-day service drop occurred in October, 2011.

The $54 million loss in revenue wasn’t all bad news for RIM, considering analysts had predicted RIM to lose $100 million due to the outage.

RIM’s revenue was down 19 percent in the fourth quarter of the 2012 fiscal year. Fourth quarter revenues are down 25 percent compared to the fourth quarter of the 2011 fiscal year.

Despite the recent decline in revenues, RIM remains optimistic about the future. Thorsten Heins, President and CEO of RIM commented about the future offerings of RIM, “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.”

He added, “In parallel, we are undertaking a comprehensive review of strategic opportunities including partnerships and joint ventures, licensing, and other ways to leverage RIM's assets and maximize value for our stakeholders.”

RIM hopes its BlackBerry 10 platform helps boost revenue and generates an overall buzz about the company amongst consumers. RIM has had a struggle competing with Android (News - Alert) and iOS devices in recent years.

RIM recently announced a push for development of BlackBerry apps using HTML5, which is the preferred coding language for developers in 2012. App development for BlackBerry has struggled lately compared to development for other markets, such as Google (News - Alert) Play, Windows and Apple products.






Edited by Jennifer Russell
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