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Research In Motion posts first-quarter net loss of $518m

More bad news for the once-dominant smartphone maker, as it prepares to slash 5,000 jobs.

As BlackBerry sales falter, the Canadian smartphone maker Research In Motion (RIM) has sunk deeper and deeper into trouble. The once-dominant tech company has reported a net loss of $518m for the fiscal first quarter ended 2 June, a startling turn for the worse compared to a net income of $695m for the same period last year. 

Diluted earnings per share were $0.99 (2011: $1.33) and revenue declined by a third to $2.81bn (2011: $4.91bn). The revenue breakdown for the quarter was approximately 59 per cent for hardware, 36 per cent for service and 5 per cent for software and other revenue.

During the quarter, RIM shipped 7.8 million BlackBerry smartphones and approximately 260,000 BlackBerry PlayBook tablets. Yet its decision to put back the release of the BlackBerry 10 to early 2013 has proved a devastating setback. As part of its cost-cutting programme, the company is planning to cut approximately 5,000 positions – almost a third of its workforce – by the end of fiscal 2013. RIM expects to incur restructuring-related charges of approximately $350m.

Thorsten Heins, president and CEO of RIM, said: 

Our first-quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January. I am not satisfied with these results and continue to work aggressively with all areas of the organisation and the board to implement meaningful changes to address the challenges, including a thoughtful realignment of resources and honing focus within the company on areas that have the greatest opportunities.

Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities.

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Is anyone prepared to solve the NHS funding crisis?

As long as the political taboo on raising taxes endures, the service will be in financial peril. 

It has long been clear that the NHS is in financial ill-health. But today's figures, conveniently delayed until after the Conservative conference, are still stunningly bad. The service ran a deficit of £930m between April and June (greater than the £820m recorded for the whole of the 2014/15 financial year) and is on course for a shortfall of at least £2bn this year - its worst position for a generation. 

Though often described as having been shielded from austerity, owing to its ring-fenced budget, the NHS is enduring the toughest spending settlement in its history. Since 1950, health spending has grown at an average annual rate of 4 per cent, but over the last parliament it rose by just 0.5 per cent. An ageing population, rising treatment costs and the social care crisis all mean that the NHS has to run merely to stand still. The Tories have pledged to provide £10bn more for the service but this still leaves £20bn of efficiency savings required. 

Speculation is now turning to whether George Osborne will provide an emergency injection of funds in the Autumn Statement on 25 November. But the long-term question is whether anyone is prepared to offer a sustainable solution to the crisis. Health experts argue that only a rise in general taxation (income tax, VAT, national insurance), patient charges or a hypothecated "health tax" will secure the future of a universal, high-quality service. But the political taboo against increasing taxes on all but the richest means no politician has ventured into this territory. Shadow health secretary Heidi Alexander has today called for the government to "find money urgently to get through the coming winter months". But the bigger question is whether, under Jeremy Corbyn, Labour is prepared to go beyond sticking-plaster solutions. 

George Eaton is political editor of the New Statesman.