Struggling BlackBerry maker Research In Motion said it will delay the launch of new phones deemed critical to the company's survival and revealed its business is crumbling faster than thought.
The Canadian company posted results for its latest quarter that were worse than analysts had expected. It is cutting 5,000 jobs and unexpectedly delaying the launch of its new phone operating system, BlackBerry 10, until after the holiday shopping season.
After several delays, the first phone with BlackBerry 10 was expected later this year. It will be delayed even longer, to the first quarter of next year, RIM chief executive Thorsten Heins said.
The delay comes as North Americans are abandoning BlackBerrys for iPhones and Android phones. Analysts have long said the new BlackBerrys will come out too late to reverse RIM's fortunes.
RIM was banking its future on the new BlackBerry 10 system, which is meant to offer the multimedia, internet browsing and apps experience that customers now demand. Now it will come out months after a new iPhone is expected to be released.
Mr Heins had vowed to do everything he could to release BlackBerry 10 this year but he said that the timetable simply was not realistic. He said RIM's top priority remains a successful launch of the new BlackBerrys.
"I will not deliver a product to the market that is not ready to meet the needs of our customers," Mr Heins said on a conference call with analysts. "There will be no compromise on this issue."
The jobs cuts are part of a previously announced initiative to cut one billion US dollars in annual costs this year. They represent about 30% of RIM's workforce of about 16,500.
Mr Heins said: "I fully understand the impact a workforce reduction of this size has on our employees and the communities in which we operate. I assure you that we wouldn't move forward with a change of this size if we didn't think it was critical for our future."
RIM shares tumbled 1.27 US dollars (81pence), or 14%, to 7.86 US dollars (£5.03) in extended trading, after the release of the results. If they hold that level into regular trading, they will set a nine-year low.