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RIM Earnings Drop 59% on Poor BlackBerry Sales

Things aren't looking too good for RIM. During its second quarter 2012 earnings report, the company revealed worse than expected year-over-year numbers with its net income plummeting from $797 billion in the second quarter of its fiscal year 2010 to $329 billion in the second quarter of its fiscal year 2011.

The company also saw its revenue fall from $4.6 billion to $4.17 billion in the same time period. Co-CEO Jim Balsillie credited the grim results to lower-than-expected shipments of "in-life products as customers worked through their existing inventory and awaited the launch of new BlackBerry 7 smartphones".

Compounding RIM's problems further was the fact that the company shipped only 200,000 units of its BlackBerry PlayBook. Co-CEO Mike Lazaridis said RIM is working on turning those numbers around through a massive software update that the company says will address a slew of nagging issues that have hurt the tablet.Improvements expected to be featured in the update include native e-mail, calendar, and contacts -- three things we knocked the tablet for in our review.

The update is also said to include the highly anticipated, but oft delayed, Android App Player. Additional improvements expected for the tablet include an enhanced web browser, multimedia video content through the BlackBerry Video Store, which will offer roughly 10,000 movies and television shows.

"We recognize that the current availability of content and applications for PlayBook has limited the near-term uptake of the device on the market and we are actively working with key partners to deliver the most desired applications and content to our targeted market segments," Lazaridis said. The company is also continuing development work on its first QNX-based smartphone, Lazaridis said, with prototype phones becoming available in the not-too-distant future.

Despite RIM's poor report, the company said it expects total revenue in the third quarter to be in the range of $5.3 to $5.6 billion, which includes smartphone shipments of between 13.5 million and 14.5 million, an increase of between 27 and 37 percent. The company also touted a 40 percent growth in subscribers. Still, the outlook for RIM is still looking pretty grey from here.