THE WRAP: RIM changes chiefs; Apple turns screw in 4Q
Device vendors dominated proceedings this week, with the resignation of RIM’s embattled co-chief executives quickly followed by news of another record quarter for Apple, and a continued decline in Nokia’s smartphone business. Also this week, equipment vendor Ericsson posted a 66% fall in net profit in the fourth quarter, and Dutch telco KPN cut its forecasts for the year ahead.
Thorsten Heins was named the new chief executive of Canadian device vendor RIM, after co-chiefs Mike Lazaridis and Jim Balsillie bowed to calls for them to quit the post amid falling earnings and device shipments.
RIM’s investors have long believed the two-man approach was hindering the firm’s fightback in the mobile phone sector, however not everyone was convinced the new man will be any better than the departing twins. Analysts questioned Heins ability to steer the firm onto a new path, particularly after he stated he won’t be doing much different to his predecessors.
The departing bosses maintain an interest in RIM, with Lazaridis named vice chair of the board, and Balsillie continuing his role as a company director.
Rival Apple, meanwhile, turned up the heat with another record quarter during which it shipped 37 million iPhones – twice the number of calendar 4Q10 – and almost doubled net profit to $13.06 billion (€9.9 billion).
The vendor briefly regained the crown of the world’s most valuable company as the bumper results caused a spike in its stock price, and was later named the top seller of tablet PCs by research firm Strategy Analytics, shipping 15.4 million iPads in 4Q10 compared to 10.5 million Android tablets.
There was no such respite for Nokia, which slipped to a loss of €1.2 billion in 2011, compared to a profit of €1.8 billion in 2010, as all its businesses struggled during the year. Smartphone shipments in the final quarter hit 19.6 million as its new Windows Phone 7 models hit stores, but the vendor has now conceded that future shipments of Symbian devices will be lower than originally forecast and declined to issue financial forecasts for 2012.
However, the Finnish vendor found some solace in the sale of its 1.5 billionth Series 40 device since 1999. A Brazilian woman tipped the balance with the purchase of an Asha 303, one of the latest breed of S40 devices.
Handsets were also a headache for Ericsson, which saw its profit fall 66% year-on-year to 1.5 billion Swedish Krona (€169 million) in the fourth quarter due, in part, to losses at its Sony Ericsson joint venture. ST-Ericsson, the firm’s chipset joint venture, fared little better, while sales of network infrastructure were also off the pace.
Dutch telco KPN is embarking on a transformation of domestic business after it experienced a similar (63%) fall in earnings in 4Q11 to €176 million. Chief Eelco Blok says the firm is aiming to bottom out its domestic broadband market share, and stabilize its share of the wireless sector.
Meanwhile, Telekom Austria revealed that the application of hyperinflation accounting practices in Belarus will actually benefit it to the tune of €100 million. While the accounting method means the firm faces a €300 million impairment charge to cover asset appreciation, the value of those assets is set to grow €400 million.
In other 4Q earnings news, Texas Instruments’ profit slumped from $942 million in 2010 to $298 million in the recent quarter; SAP expressed confidence in continuing sales growth that boosted profit from €434 million in 4Q10 to €1.2 billion in 4Q11; and US operator Verizon slipped into the red with a loss of $2.02 billion compared to a $2.64 billion profit in 4Q10.
The week wasn’t all about 4Q earnings and device shipments. Spanish incumbent Telefonica boosted its cloud expertise by investing in cloud operator Joyent. The telco was one of several investors that contributed to an $85 million funding round by Joyent.
UK regulator Ofcom revealed it will draft in wireless spectrum from public sector bodies including the Ministry of Defence to meet demand during the Olympic Games in London this summer. The regulator reckons it must assign up to 20,000 wireless frequencies to the event, and also plans to draw on civil, digital dividend and unlicensed spectrum.
And O2 was forced to apologize after a gaffe that revealed the phone numbers of its UK subscribers accessing web sites via mobile Internet.
The problem started after changes made during maintenance work earlier this month, and could result in a probe into the operator by UK authorities after the operator admitted routinely passing subscriber details to websites.