Research In Motion Ltd. (Nasdaq: RIMM), which has lost 95 percent of its market value since 2008, is selling one of its two business jets under a plan to save $1 billion in operating costs, two people with knowledge of the matter tell Bloomberg news.
The maker of BlackBerry devices put its nine-passenger Dassault Aviation SA F50EX up for sale, trying to fetch $6 million to $7 million, one of the people said. The person declined to be named because the sale hasn’t been completed. Selling the midrange jet would leave RIM with one Dassault F900EX, a longer-range aircraft that can fit 14 passengers, the person said.
Chief Executive Officer Thorsten Heins, who was expected to face investors today at RIM’s annual shareholder meeting, is trying to rein in costs as the company’s smartphones fall out of favor and losses mount. A 47 percent plunge in U.S. sales last year has left RIM increasingly dependent on markets such as Indonesia and South Africa, forcing its top executives to roam further afield for sales growth.
The company has offices in at least 27 countries and sells phones in more than 175 markets.
[RIM has declined to discuss its plans for its research and development operation in Research Triangle Park, N.C.]
“We’re looking at options with both our aircraft costs and finding ways to reduce our travel while still making sure we keep in close contact with our partners around the world,” Waterloo, Ontario-based RIM said in a statement in response to inquiries from Bloomberg. “It’s all part of the effort to find ways to reduce costs and drive efficiencies that Thorsten Heins has talked about.”
RIM is holding its meeting in Waterloo, Ontario, at 10 a.m. Tuesday, less than two weeks after announcing disappointing financial results, deep job cuts and the latest delay in its BlackBerry 10 software.
Its stock closed Monday at $7.67, down 43 cents, or 5.3 percent, for the day. That’s near a nine-year low of $7.14.
Analysts believe RIM is running out of time to turn itself around.
Sales of the once-pioneering BlackBerry phones fell 41 percent in the latest quarter and likely won’t pick up again until new phones come out next year.
By then, people will have even more choices, including a new iPhone expected from Apple this fall and phones running the latest version of Google’s Android software, called Jelly Bean. Phones running a revamped version of Microsoft’s Windows system are also coming this fall.
Although BlackBerrys were once a staple in corporate environments because of their reputation for security and reliability, they’ve lost their cachet as iPhones demonstrated that smartphones are good for more than email.
The BlackBerry’s U.S. market share has plummeted from 41 percent in 2007, when the first iPhone came out, to less than 4 percent in the first three months of 2012, according to research firm IDC.
RIM portrays BlackBerry 10 as its way of catching up. It promises the multimedia, Internet browsing and apps experience that customers now demand.
(Bloomberg and The Associated Press contributed to this report.)