“In five years I don’t think there’ll be a reason to have a tablet anymore,” Heins said in an interview yesterday at the Milken Institute conference, according to Bloomberg. “Maybe a big screen in your workspace, but not a tablet as such. Tablets themselves are not a good business model.”

They certainly haven’t been a good business model for BlackBerry. The company’s PlayBook tablet was unquestionably a failure, one that forced it to take a $485 million charge to write down unsold inventory in 2012. But for other companies — most notably Apple — the tablet market has been quite lucrative. In Apple’s last quarter, the company shipped 19.5 million iPads — 7.7 million more than it did the year prior.

So what’s Heins’s problem with tablets? There would seem to be two. The first: BlackBerry doesn’t have a good angle on the tablet business yet — something it needs to compete in a market where profits can be tight. The company is reevaluating its approach, because right now the tablet market is a lousy place for BlackBerry and pretty much any company not named Apple or Samsung.

The second: The mobile computing space is evolving very quickly, and Heins seems to have doubts about the viability of tablets going forward. Now, regardless of how much credence you lend that view, you’ve got to concede that five years is an awful long time in tech; few companies know that better than BlackBerry, which saw its early lead in smartphones whittled away in short order by Apple and Google. Who knows? Maybe some new technology will emerge in the next few years that will kick the legs out from under the tablet market. Sounds implausible now, but a few years back, the BlackBerry was widely known as the CrackBerry, and no one was using iPhones.

In any event, BlackBerry’s official position is not to read too, too much into Heins’s dismissal of the tablet market.

“The comments that Thorsten made yesterday are in line with previous comments he has made about the future of mobile computing overall, and the possibilities that come with a platform like BlackBerry 10,” BlackBerry spokesman Alex Kinsella told AllThingsD. “We continue to evaluate our tablet strategy, but we are not making any shifts in that strategy in the short term. When we do have information about our PlayBook strategy, we will share it.”

However, when it comes to future tablets, Heins said the company is trying to figure out a way to combine software and services, since selling tablet hardware alone is a tough way to make money at the moment.

“We are looking for specific value-added services on top of the tablet,” Heins said.

His comments came in a question-and-answer session following the announcement of the first two BlackBerry 10 phones in New York.

He also addressed a few other questions, including the expected April arrival of the second BlackBerry 10 phone, the physical-keyboard-packing Q10.

As for battery life, the Z10 should get users through the day, Heins said, adding that the battery is removable for power users who want to carry a second.

Asked how he would measure success, Heins said that the company had specific sales targets, but he didn’t share those. Instead, he handed it off to marketing chief Frank Boulben, who said the goal is for early users to be very happy, and that, beyond that, the company hopes to quickly become the No. 3 player in smartphones.

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As encouraging as it might be to hear brokerages giving BB10 a one-in-three chance of success and to read that the OS has been positively received by carriers, there are a handful of issues that belie such tentative optimism. And to some extent they’re similar to those that hamstrung RIM’s foray into the tablet market. In fact, some would say they’re identical.

“We saw similar optimism around the PlayBook ahead of its launch and we think recent sentiment about BB10 performance in the market is again too optimistic,” said Wedge Partners analyst Brian Blair, who describes recent enthusiasm for the operating system’s prospects as something of a stretch. “We don’t see any scenario where the new device could make a meaningful dent in the consumer or enterprise market next year.”

What’s there to stop it? The same things that undermined PlayBook. Strong competition from more established rivals, and consumers that have had more than enough time to develop strong affinities for their platforms.

RIM’s task with BlackBerry 10 is to create a mobile platform that’s as compelling as iOS and Android, just as its task with PlayBook was to create a tablet that matched or surpassed the iPad. That’s a tall order, and one that RIM seems ill-equipped to fill. Clearly, it didn’t manage it with PlayBook. Can it pull it off with BB10?

It would be quite a feat if it did, and fascinating to watch. But it’s going to be extraordinarily difficult.

“RIM will be offering an entirely new OS, a brand new UI and experience to its user base,” said Blair. “And when compared to the other … major players in the smartphone market next year, we don’t believe that BB10 will offer anything more than the existing options. In fact, we expect most reviews of BB10 to confirm that it offers less. … And unless the price points are substantially lower than existing offerings, it will be a very tough sell once it’s on the shelves.”

“We are not developing a ‘me-too’ product or a copycat of what already exists,” Frank Boulben said in an interview on Monday.

What the company is trying to do, Boulben said, is create something that is better than the iPhone or Android for a specific segment of users — always-connected multitaskers looking to get a lot done quickly.

It’s a group that Boulben said includes executives like himself, as well as busy moms and hyperactive teens like his daughter.

“We are designing it for a particular type of user,” Boulben said.

Current devices, while elegant and easy to use, don’t meet the needs of that segment, Boulben said.

RIM is showing off a couple of new features this week, including a new, always-available BlackBerry Hub that brings up an inbox of incoming email and social networking messages, as well as upcoming calendar appointments and time-sensitive alerts from other applications. It also features an easy way for people to segment their work and personal lives — and the data that belongs with each.

What the company isn’t doing, though, is shipping anything at all new this holiday season. After several delays, RIM is now aiming to get the first BlackBerry 10-based phones on the market early next year.

Boulben, though, has picked up the company line on this, making lemonade out of the fact that RIM is missing one of the busiest sales periods of the year.

“Launching after the Christmas season, in terms of educating the public and training the sales force of carriers, is a better window than the frenziedness of Christmas,” Boulben said.

For going on a couple of years now, the BlackBerry maker has been pitching coders on the virtues of its next-generation operating system. But the software still has yet to find its way onto any phones, and the PlayBook tablet — its lone device feature, the QNX-based operating system — has fallen flat.

RIM is assuring developers and customers that the first BlackBerry 10 phones will arrive early next year, following several delays.

Not surprisingly, developer interest has waned amid the delays and the company’s declining market share. According to a recent survey from Appcelerator, the number of mobile developers that are “very interested” in building apps for the BlackBerry phone declined to an all-time low of 9 percent, down from nearly 40 percent as of January 2011.

Aiming to woo those who remain, and perhaps lure a few off the fence, RIM is set to address a crowd of developers later on Tuesday, as it kicks off its BlackBerry Jam Americas conference in San Jose. AllThingsD will have regular updates once the event begins in a few minutes.

Earlier:
8:25 am: Loud techno music and spinning disco lights. Just what everyone wants at this hour.

8:31 am: RIM CEO Thorsten Heins takes the stage.

“There’s actually no other place I’d like to be right now,” Heins said. Um, good, I guess.

Heins promises a new era of mobile computing that brings forward the best of BlackBerry, including productivity and security, but tailored for devices that have nearly the power of a laptop.

8:33 am: Heins promises a shift away from current mobile platforms with their “in and out” approach to apps, with the main navigation being the home button.

The BlackBerry Hub, a feature being shown off for the first time on Tuesday, allows users quick access to their email, social network messages and other time-sensitive info.

8:35 am: He gets in a good jab at Apple, noting that the new BlackBerry 10 devices will use the same HDMI and USB connectors as past devices.

“We all can save some money,” Heins said.

8:39 am: Heins also promises a keyboard that people can actually type on — on both all-touch devices and those with a mini-keyboard.

“With BlackBerry 10, I promise it will just get better,” Heins said. “We will take predictive text to a whole new level.”

The basics are all better, including a “killer, fast browsing experience” and improved camera and multimedia abilities.

“Make no mistakes, we have the must-haves,” Heins said.

8:42 am: Heins said RIM is lining up carriers to make sure there is lots of support for the first crop of BlackBerry 10 devices.

“They have said that it is beyond their expectations,” Heins said. “They have said it is different and better.”

Heins said he is on a carrier road show, and just got back from Southeast Asia where, in some markets, BlackBerry adoption still outpaces smartphone growth.

8:45 am: Enterprise customers are also excited, Heins insisted.

My first journalism professor said one of the most important rules is to “show, don’t tell.” Heins is doing a lot of telling.

8:47 am: An update to the BlackBerry developer tools is coming today.

“BlackBerry 10 is on track,” Heins said, promising devices are just “a few short months away,” with carrier testing starting shortly.

Heins said RIM is making believers out of people who had previously written the company off.

He also thanked developers for their patience.

“We understand the BlackBerry platform was not always easy to develop for, but those days are gone,” Heins said. “You stuck with us, and we thank you.”

8:50 am: Heins apparently was thinking the same as me, noting that showing is better than telling.

With that, he brings out a colleague to show off BlackBerry 10.

8:51 am: RIM is showing BlackBerry Flow, the company’s design interface.

To unlock the device, you simply move your finger around, uncovering the phone’s main screen underneath. (I’m guessing a password will also be involved for many BlackBerry users.)

Another feature, BlackBerry Peek, lets users glance at the hub from any application, without leaving the program.

A right-angle sort of gesture pulls up the hub from anywhere else in the system.

8:56 am: A “people” feature lets users see not just when the next meeting is coming up, but who is there, as well as those people’s status updates and information on the last interactions with those people.

8:57 am: Heins notes that all that is done with one thumb, so it can be done while grabbing a bag and rushing through the airport.

“It’s magic,” he insists.

9:01 am: The BlackBerry Balance feature separates work and personal use of the device, allowing corporations to set rules for one part of the device, and give a worker more freedom in the personal side of things.

There are separate browsers in each, with information in the corporate side kept from being moved over to the personal side.

“That is fantastic for CIOs,” Heins said. (But will workers — who often make the purchasing decisions these days — choose to buy the device?)

9:06 am: Heins said there is more to the new operating system. “What we’ve shown you right now is just a glimpse of what is coming,” Heins said.

A software update will allow developers to run some of the features shown Tuesday on the “Dev Alpha” prototype devices given to BlackBerry programmers.

9:07 am: BlackBerry also recognizes now that it has to change, Heins said, noting that the company has a new “fighting spirit.”

(Click here for our just-published interview with RIM marketing chief Frank Boulben.)

9:08 am: The company now has 80 million users, up slightly from prior quarters. Some analysts predicted that the company might actually see its user base dip this quarter.

RIM reports full quarterly earnings on Thursday.

“We are fighting,” Heins said, wrapping up his part of the keynote speech. “Join us.”

That gives way to a cover of REO Speedwagon’s “Keep on Loving You.” Words can’t describe. Uploading video clip to YouTube now.

9:14 am: In the meantime, BlackBerry developer head Alec Saunders has taken the stage.

And here’s that video:

9:17 am: Saunders is making RIM’s multi-pronged pitch to developers, promising them they can write in HTML5, native code or even customized Android apps.

Saunders is pitching how developers can integrate their programs with the BlackBerry Hub, allowing customers easy access to their apps and time-sensitive info.

One way to think of BlackBerry Hub is something of a unified-inbox-meets-notification-center.

Although RIM is offering several options for developers, Saunders said they will make more money if they develop programs that run natively on BlackBerry 10 and take advantage of features such as BlackBerry Hub.

9:21 am: RIM is also releasing to developers a Dev Alpha B, an updated version of the prototype hardware it has been giving programmers to test out their BlackBerry 10 apps.

9:22 am: Did I mention that you have to watch this video? Seriously. I haven’t seen a tech company video quite this, um, special, since Texas Instruments’ in-house band crooned about DSPs a decade ago.

9:25 am: Loud video playing telling the crowd the 10,000 reasons to believe in BlackBerry 10. Thankfully, it is a reference to their $10,000 promise to developers who build apps, rather than a list of 10,000 reasons.

Saunders is encouraging people to tweet to #bb10believe.

9:27 am: Now up, Martyn Mallick, VP of global alliances for RIM. Let’s see if RIM has any big new deals to announce.

9:27 am: Farhad Manjoo notes that the RIM video has only gotten “dislikes” on YouTube thus far. No accounting for taste.

Another favorite Twitter comment. “He makes Steve Ballmer look cool.”

Meanwhile, Mallick is showing off some slides of publishers and media brands that are building for BlackBerry 10.

A&E, the History Channel and ESPN are a few that Mallick called out, promising that the slides represented just the tip of the iceberg (insert BlackBerry/iceberg joke here).

9:31 am: Mallick promised Facebook, LinkedIn, Twitter and Foursquare will all be available at launch.

Mallick is showing a preview of the native BlackBerry 10 Facebook app. (There is also Facebook integration, so people can update their status from within other Facebook apps.)

9:35 am: On to App World, BlackBerry’s built-in app store.

There are 105,000 apps in the current store, RIM says. (Most of those are for current BlackBerry devices, however.)

BlackBerry 10 store will allow renting or purchase of videos, and music purchase by song or album.

9:41 am: Here’s an AllThingsD video demo of BlackBerry 10 in action on one of the new Dev Alpha B devices.

9:42 am: Saunders is offering up the details on the BlackBerry program that guarantees developers will earn $10,000 if they meet certain criteria.

They have to submit their apps by Jan. 21, 2013, and earn a minimum of $1,000. If they reach that level, but not $10,000, RIM will write a check for the difference.

The company will start taking BlackBerry 10 app submissions on Oct. 10 (10/10 for BlackBerry 10, Saunders explains).

9:44 am: Developers who submit their apps by the January deadline will also be able to exchange their Dev Alpha device for a limited-edition BlackBerry 10 phone.

Saunders also cited a third-party study that finds BlackBerry developers earn 4 percent more than iOS developers per app per month, and 35 percent more than Android developers.

At the show, RIM has a “porting lounge” to help developers move their apps from other mobile platforms; the company also plans events in various cities in the coming months.

“Now is the time to join us,” Saunders said, summing up his pitch to developers. “You will make money with BlackBerry, just as you already are [making money] with BlackBerry.”

Now he is sounding like a preacher. “We believe. We believe.”

9:49 am: Now up, Don Lindsay, head of user experience design for RIM.

Lindsay is, not surprisingly, talking about the design elements of BlackBerry 10.

Lindsay is talking more about the “peek” feature, which allows users to glance at another app without constantly going back to the home button.

The thinking behind peek, Lindsay said, was to allow apps to take up the full screen without any navigation and yet still allow easy access to other information.

Getting other information, Lindsay said, should be as easy as looking at your watch.

“You can achieve this without missing a beat,” Lindsay said. “You never lose context.”

Peek, he said, keeps you in control.

Too often, Lindsay said, smartphone users today are pressing buttons just to check the time or see a notification. “When you start playing with it, it feels incredible,” Lindsay said. “It feels like you are in control.”

“At the risk of making a really bad pun, I hope I have ‘peeked’ your interest,” Lindsay said.

10:00 am: The head of development tools is on stage to talk APIs, SDKs, and other nerdy subjects.

But I have good news. RIM has posted the full video of that REO Speedwagon cover on YouTube (I only had a short clip).

Meanwhile, nerd-speak continues. (It is a developer conference, after all.)

Long story short: Developers can take advantage of “peek.”

10:09 am: RIM said that the updated software development tools aren’t final, but promised the company won’t change the major programming interfaces between now and the final release.

10:11 am: First non-RIM speaker of the day, more than 100 minutes into the keynote.

It’s Pete Nofelt, a senior software engineer from Foursquare, showing off a BlackBerry 10 version of the location-based services app. Some 250 Million check-ins have come from BlackBerry, Nofelt said, leading the company to develop for BlackBerry 10.

10:15 am: Another partner, Cisco, onstage to talk about WebEx for BlackBerry 10.

One nice feature: It can call you when a meeting is starting. No remembering dial-in codes.

10:21 am: Sean Paul Taylor, who works in the gaming area, is onstage to announce and demo some games that are in the works for BlackBerry 10.

Gameloft’s Shark Dash is the first demo. Seems to be some kids’ game with a bathtub and fish.

10:24 am: There’s some other games, too; a multitouch shooter from a start-up is currently being shown.

The message here: Having some good games is important even for the productivity crowd, and RIM is on it.

10:35 am: Keynote still going. BB10 browser getting a demo, with RIM promising it is the highest-scoring browser on HTML5 benchmark — mobile or desktop.

The BB10 browser itself is a Web app, written in HTML5 and JavaScript.

Keynote is wrapping up. Q&A with Thorsten Heins and the media later today.

It’s been nice to see all the euphoria at Yahoo about free food and Apple iPhones kicking it up a notch.

But, purple people, guess what? Them’s just your basic table stakes in Silicon Valley these days and pretty much everyone else has had such perks for a long while now.

Thus, as nice as it is to drink your coconut water gratis, after two months in charge, it’s long past time to focus on what new Yahoo CEO Marissa Mayer is up to besides making much-needed but obvious cultural changes at the troubled Internet giant.

She’s been busy with the expected listening tour of employees and also outside tech players — such as former Yahoo CEO Terry Semel — which is a textbook stop in the turnaround playbook.

Now comes the hard part: Actually beginning to make the significant decisions about how she’s going to turn around Yahoo and what the key issues of strategic focus need to be.

In a series of recent meetings, according to numerous sources inside the company, Mayer has begun to outline what those are to top staff.

Not surprisingly, they are many of the same thorny issues that Yahoo has been facing for a long time and which center primarily on making the company relevant again in a wide number of ways.

I’ll get to many of them over the next week in a series of What Will Marissa Do? posts — including looking closely at her new hires, when and how Mayer will deal with inevitable layoff decisions facing the company, where the sale of Yahoo! Japan stands and, finally, what she’s cooking up for key Yahoo products.

But the focus has to fall first of all on search and advertising, the two arenas that Mayer has been studying most closely, according to numerous sources close to the situation.

That has included a recent meeting and numerous discussions with Microsoft CEO Steve Ballmer about improving Yahoo’s search advertising partnership, said sources at both companies.

That deal has been largely disappointing since it was struck under the regime of ousted CEO Carol Bartz several years ago.

Many reasons are given for the poor performance of the entire arrangement, including lack of improvement of cost per click and share growth for both parties. That means bid density and numbers of advertisers remain too low, especially compared to Google’s offering of access to a larger, more active and lucrative market.

Simply put, despite massive spending by Microsoft on search, users and advertisers get significantly better results overall with the search leader Google.

(You can read a great piece by Search Engine Land’s Danny Sullivan from last year, which exhaustively looked at the issues until then.)

The irony abounds that it’s up to Mayer to fix this problem of improving revenue per search with Ballmer, since she has been among the executives who have made Google the search behemoth it has become.

Her particular expertise has been on search experience for consumers, which is just the area that Yahoo desperately needs to improve after handing over technology duties to Microsoft.

That move was controversial at the time and some feel it was a big mistake. But, most also think there is no going back at this point, given the enormous cost of running a serious search enterprise.

Such an idea is still being raised inside Yahoo, although it seems more nostalgic than a realistic possibility, given the enormous price and, more importantly, the departure of the company’s core search engineers in recent years.

That doesn’t mean Yahoo under Mayer can’t be key to helping solve Microsoft’s search tech problems. She certainly knows the entire arena, which has already given Yahoo increased credibility among Microsoft’s search engineers.

“None of Yahoo’s many CEOs knew anything about search technology and that’s certainly not the case here with Mayer,” said one person close to the situation at Microsoft. “When she walks in, she instantly has status among the geeks as someone who knows what she’s talking about.”

It still may be a losing battle, due to Google’s overwhelming dominance, but if anyone at Yahoo can spot areas of even small improvement — which can yield big returns — it could be Mayer.

In addition, she can spearhead Yahoo’s own efforts to reverse — or perhaps simply stop — search market share declines via delivering a better consumer offering.

That’s still heavy lifting, no matter the exec, since both Microsoft’s Bing and Google are better equipped to win here, too.

“It hard to imagine we are going to slow down in any way,” said one former colleague of Mayer’s at Google to me recently in a rather ominous tone. “We’re only going to get more competitive.”

Pressure much?

And more: Mayer is under a time limit, since guaranteed payments Microsoft agreed to pay Yahoo for the shortfalls on what was promised will be running out next year. The pair has renegotiated that deal before, and it will likely have to do so again.

Of course, Mayer could try to walk and threaten to take Yahoo’s search business elsewhere, a move that former CEO Scott Thompson was mulling before his ouster.

That’s not a surprising ploy, except it is probably impossible to pull off, a fact acknowledged by top Yahoo execs.

“It might feel good to say we have options in search,” said one person close to the situation. “But that ship sailed years ago.”

Indeed, especially since Google is the only choice of possible alternate partners and such a move is rife with major obstacles.

There is the issue of the contract with Microsoft, which could lead to a potentially explosive legal struggle Yahoo can ill afford.

“They can try to get out of the deal,” said one high-ranking person at the software giant. “But that’s a lot easier threatened than done.”

And, there is the clear regulatory hairball any search hook-up between Google and Yahoo would lead to.

That’s happened before, which Mayer knows well since she was a top exec in Google’s business when it tried to partner with Yahoo as a way to prevent Microsoft’s hostile takeover bid for the company.

While times might have changed, Google is currently facing a likely battle with the Federal Trade Commission over its powerful search business, and trying to get Yahoo’s business now is a non-starter.

Thus, finally fixing the Microsoft partnership is key to Mayer’s success since it represents a little over one-third of revenue of Yahoo (see the chart below).

The bigger part of Yahoo’s business, as you can also see from the chart, has been display revenues. And that, too, has been a sorry tale of declines and ever more disappointing results.

A report by eMarketer on display market share had this depressing chart for Yahoo:

As is clear, the march downward for one-time leader Yahoo has been swift, and the prospects for the future are worse as Google and Facebook vie for leadership.

The reasons for this have been myriad, but Mayer has apparently decided that it’s been due in large part to the broken Yahoo ad tech platforms and their ever weaker performance.

As we have previously reported, she has determined that it’s now time to invest in improving them, both by funding internally and external acquisitions.

For that, she has formed a tight group of execs to scan the landscape for tasty and innovative treats for Yahoo to gobble up.

That includes: Scott Burke, SVP of Yahoo’s advertising and data platforms; Brian Silver, who runs the company’s Right Media Exchange; Xuhui Shao, a key engineering VP under Burke; and Mark Morrissey, the longtime tech exec who previously ran the company’s search business and was key to integrating the Microsoft search deal into place.

The cerebral Burke especially has been pushing ad platform improvement for a while and finally seems to have won the battle against detractors of the big and possibly grandiose plan by appealing to Mayer’s interest in not giving up.

Thus, the tabling of plans by Thompson, as well as interim CEO Ross Levinsohn, to outsource some of the automated parts of the display business to Google.

Those talks were very serious, as well as others to sell off Right Media, but they are done for now.

One major issue — the people in charge of the ad platform turnaround could also be seen (and most definitely are) as mired in Yahoo’s legacy of lackluster results and poor performance.

“It is kind of funny that the guys responsible for the decline now have the responsibility for fixing it,” said one source at Yahoo.

It’s a fair point to be made.

But that’s water under the bridge, apparently, since the group has been making the rounds, helped by Yahoo’s M&A execs, with a wide range of companies in many different ad tech area being considered (and some dismissed), including: Mediaocean, Turn, Criteo, PubMatic and Millennial Media.

Millennial is the most interesting, because it is a mobile ad play, where Yahoo is exactly nowhere (to be fair, less than nowhere) after years of botched efforts.

As with other companies, this is a critical arena for Yahoo, and yet one more that Mayer needs to focus on.

Lastly, Mayer has to make sure Yahoo’s premium display business remains strong. This is much more based on relationships with large advertisers than on major sponsorship and branding offerings, as well as creating consumer products and content that is appealing to marketers.

This area is now headed up by former Google exec Michael Barrett, who has publicly said he was staying put for now at Yahoo as its chief of revenue.

In fact, because he is in charge of all sales, he occupies the second slot under Mayer on Yahoo’s now strangely configured, punctuation-impaired and information-free management page.

But numerous sources inside and outside Yahoo said Barrett has also told many people that he is still not fully committed to staying in the role for the long haul.

If he eventually gets a lucrative exit package — something the new boss is not being very generous with overall, said sources — that will mean Mayer will need a high-profile and well-regarded ad exec to replace him; sources said Mayer has already begun reaching out to some candidates.

The pickings are slim, with only a few names on the list of those capable of taking on such a job. That includes: Demand Media’s Joanne Bradford, who was also a former top Yahoo exec; Microsoft’s Yusuf Mehdi; OWN’s Kathleen Kayse; MLB.com’s Bob Bowman; and any number of Google execs.

In that regard, as with all the other search and advertising overhaul efforts at Yahoo, it is a matter of attracting serious talent into the company going forward.

More on that — and more — to come.

Posting financials after market close Thursday, RIM reported a gruesome first-quarter loss of 37 cents per share on revenues that declined 42 percent to $2.81 billion. That loss excludes a pre-tax charge of $335 million for impairment of goodwill. Add that to the mix and RIM recorded a net loss of 99 cents.

Analysts had expected RIM to post a net loss of 3 cents a share on revenue of $3.1 billion for the period, so this was truly a flailing miss. Making matters worse: The announcement of layoffs of 5,000 employees and the delay of the BlackBerry 10 operating system until 2013.

The quarter also included a nasty decline in BlackBerry shipments — to 7.8 million from 11.1 million last quarter. The company said it shipped about 260,000 PlayBooks, which is a little more than half the number it shipped last quarter.

“Our first quarter results reflect the market challenges I have outlined since my appointment as CEO at the end of January,” CEO Thorsten Heins said in a dour earnings announcement. “I am not satisfied with these results and continue to work aggressively with all areas of the organization 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.”

Sad news for the handset pioneer, and for its investors as well. At $7.70, RIM shares are down well over 15 percent in after-hours trading.

In a statement to AllThingsD, RIM said that the 16GB PlayBook will be available until inventory runs out, but it has already stopped making new ones. Why? According to RIM, “There is more value for our customers in the higher-capacity models (32GB, 64GB), and as such we have decided to focus our efforts here.”

Translation: There isn’t enough demand for the PlayBook to justify manufacturing a 16GB model anymore. Sales of the device have been lackluster since it first launched, causing RIM to fall short of its financial targets. Indeed, late last month RIM warned that it will have an operating loss in the current March-June quarter. So it’s not a surprise to see the company reevaluating its product lines. Which is not to say that it’s mulling an exit from the tablet market. According to RIM, it’s in the space for the long haul.

“We continue to remain committed to the tablet space and the 32GB and 64GB models of the BlackBerry PlayBook continue to be available from our distributors and retailers around the world,” the company said.

Most of the documents filed with the Federal Communications Commission were kept confidential, but the limited information posted to the agency’s Web site suggests that the tablet contains support for several flavors of wireless connectivity, including Wi-Fi and LTE. The filing also makes reference to Bluetooth and near field communications capabilities.

The move isn’t a shock, given that RIM has promised that an LTE-capable PlayBook would be out later this year.

Whether buyers will be interested in the device is an open question, however.

During a media briefing at BlackBerry World this week, RIM CEO Thorsten Heins told attendees to expect a 4G LTE-enabled PlayBook “later this year.” He provided no details beyond that, revealing nothing about potential carriers, specs or pricing.

So, for now, we have only RIM’s word that the device is coming relatively soon. Which is encouraging and somewhat dubious at the same time. Remember, RIM first announced plans to release a 4G version of the PlayBook in January of 2011, promising to deliver it that summer.

In June, former RIM President and co-CEO Mike Lazaridis reiterated that plan, but pushed the launch date to the fall.

“We are now on a steady cadence of features and applications releases using our industry leading automatic wireless software update for PlayBook, including Facebook and video conferencing,” he said. “We are soon to release native email and BBM in our Android player later in the summer. To be followed in the fall with 4G PlayBooks for WiMAX, LTE and HSPA+.”

But that never happened. Sprint scrapped its WiMax PlayBook plan in August. And a promised LTE version of the device didn’t debut that fall, and hasn’t shown up since.

Of course, 2011 was a rocky year for RIM, and the company had more important things to worry about than the LTE PlayBook — like taking a $485 million writedown for discounting the first version of the device. Perhaps now, with its new leadership in place and BlackBerry 10 presumably on track for launch late this year, RIM finally has the focus and chops to deliver the device during the window Heins has promised.

To wit, Barclays’ latest CIO survey, which shows the so-called “consumerization of IT” in full swing. The research house polled 100 CIOs — 65 in the U.S. and 35 in Europe — across varied industries, and found a solid uptick in tablet adoption.

A staggering 93 percent of respondents noted some level of interest in tablets, with 40 percent saying the devices are already in use at their companies, and another 36 percent saying they were either trialing or testing them. Interestingly, 40 percent of respondents described tablets as an incremental hardware purchase. Another 40 percent said the tablets they purchased would be used to replace laptops.

And what sorts of tablets are these folks buying or trying? They run the gamut, really — with a strong leaning toward the market leader.

“Apple was the vendor most often cited, but there was also interest in Microsoft and Android tablets as well (RIM fell from our prior survey),” Barclays analyst Ben Reitzes explains. “We believe that given Apple’s strength in the smartphone and tablet markets the company is seeing higher rates of adoption in the enterprise market as a result of the BYOD trend.”

All of this, of course, bodes well for the tablet market and for Apple, which continues to drive it — particularly with corporate spending on tablets clearly on the rise.

And now, for your listening pleasure, Flight of the Conchords, with “Business Time”:

The document reveals that in RIM’s February 2012 fiscal year, gross margins on hardware fell to 20 percent from 36 percent on a GAAP basis, and to 25 percent on a non-GAAP basis. And, according to Jefferies analyst Peter Misek, if you factor operating costs and inventory charges into those numbers, hardware-operating margins slip into negative territory: -8 percent on a GAAP basis; -3 percent on a non-GAAP basis, or -4 percent on an adjusted non-GAAP basis.

Nasty numbers, all of them. So which is the most accurate?

Misek believes it’s the adjusted non-GAAP number, which excludes restructuring, litigation and goodwill-impairment charges, but includes the $752 million in inventory write-offs RIM took for the quarter. Some might argue that including those write-offs skews the numbers here a bit, but Misek points out that RIM has written off inventory in the last two quarters, and is likely to do so again in the next.

So, whether it was 8 percent, 3 percent or 4 percent, RIM’s hardware division probably spent more than it made. Indeed, that may well have been one of the drivers of the “comprehensive review of strategic opportunities” CEO Thorsten Heins announced after the company reported abysmal fourth-quarter earnings. But that review isn’t likely to do much for the hardware business for some time. If hardware is in the red, then it’s probably going to remain there for a while longer — at least until the debut of RIM’s BlackBerry 10 devices. And that’s not scheduled to happen until late in the year.

The market research firm said today it expects worldwide tablet sales to surge 98 percent to 118.9 million units. Of those, Apple’s iPad is expected to account for a staggering 61 percent. Android tablets will account for 31.9 percent, tablets running Microsoft’s Windows 8 another four percent and RIM’s PlayBook about two percent.

The iPad’s lead in the tablet market is clearly a commanding one and tough to follow, let alone match, as Gartner’s Carolina Milanesi observed in her report on the new data.

“Despite PC vendors and phone manufacturers wanting a piece of the pie and launching themselves into the media tablet market, so far, we have seen very limited success outside of Apple with its iPad,” Milanesi said. “As vendors struggled to compete on price and differentiate enough on either the hardware or ecosystem, inventories were built and only 60 million units actually reached the hands of consumers across the world. The situation has not improved in early 2012, when the arrival of the new iPad has reset the benchmark for the product to beat.”

Worldwide Sales of Media Tablets to End Users by OS (Thousands of Units)

Source: Gartner (April 2012)

In a post to the BlackBerry Developer Blog this morning, RIM VP of Developer Relations Alec Saunders denied that the company is dropping sideloading from the PlayBook, though that is exactly what he said just a few days ago. According to Saunders, there is a more “nuanced” interpretation of the statement he made on Twitter.

What Saunders really meant when he said “we’re removing sideloading for consumers” is this: “We’re not getting rid of sideloading on the BlackBerry PlayBook OS or in BlackBerry 10.”

In other words, “removing” was simply a euphemism for “not removing” that went right over all our heads.

Clever!

So now Saunders is setting the record straight. In short, RIM will retain sideloading as a developer feature, and will add some antipiracy measures to it that will prevent its abuse by consumers.

“Sideloading on our platform is changing in nature,” Saunders wrote. “Sideloading is a developer feature. It exists so that developers can load their apps onto their own devices to test. It’s there so developers can send a beta release to their testing community for review. It is definitely not there for some people to side load a pirated app. … Starting with our next release of the BlackBerry PlayBook OS, we’re introducing a feature that will encrypt apps so they can only be run by the user who purchased the app.”

The growing list of paid Android applications being repackaged as free ones that can be run on the PlayBook is causing their creators some dismay. Which is understandable. It doesn’t take much to repackage an Android app for PlayBook, and once it’s repackaged, it’s quite easy to distribute and easily pirated.

For developers, that means lost revenue — and, potentially, bruised reputations — if the repackaged app doesn’t perform as it should. And for RIM, which is hellbent on creating a thriving developer ecosystem around the PlayBook, that’s bad news, indeed.

So the company is doing something about it. It plans to drop app-sideloading support from the PlayBook in a forthcoming update. “We’re removing sideloading for consumers,” said Alec Saunders, RIM’s VP of Developer Relations, adding that the company is very sympathetic to developers’ concerns about app piracy.

“Piracy is a huge problem for Android devs, and we don’t want to duplicate the chaotic cesspool of Android Market [now Google Play],” he said.

Instead, it looks like RIM may follow Apple’s lead, adopting for BlackBerry App World the same sort of closed system that gives Apple such tight control over the iTunes App Store.

Could be worse. Could be raining ...

Filed in U.S. District Court in Orlando, Florida, the city in which RIM plans to hold its annual BlackBerry World conference next month, NXP’s suit accuses RIM of violating six patents issued between 1997 and 2008 covering everything from wireless data transmission range expansion to computer bus systems and circuit manufacturing processes. It seeks an injunction against further infringements as well as lost profits and treble damages for what it claims are willful infringements.

For RIM, the suit’s timing couldn’t be worse. Reporting dismal fourth-quarter earnings last week, the company said it will stop issuing financial forecasts as it reviews its strategic options. Investors have been beating the hell out of it ever since. And for a company whose shares have already fallen more than 80 percent in the last 12 months, that is truly bad news.

RIM declined comment on the suit, citing its policy about pending litigation.

Some employees, though, will feel the impact more immediately. Heins noted on the conference call Thursday that he plans to reorganize things right away, with a new leadership structure to be announced today.

RIM made a couple of organizational changes already, announcing the departure of longtime executives David Yach and Jim Rowan, as well as the fact that former chief Jim Balsillie was leaving the board. But the changes are expected to go deeper than that.

The Globe and Mail reported on Thursday that the company was also slashing some executive positions at the vice president and senior vice president level. RIM didn’t announce those moves, though Heins did make reference to RIM having too complex a structure and not enough accountability.

RIM is apparently not planning to announce the additional moves, characterizing them as involving more the “working level” than the executive leadership.

Heins did say that he has been searching for a new marketing chief, and expects to have something to announce soon. In addition, Heins said he wants to hire a new chief operating officer with sole responsibility for operations management.

The real question, though, is whether any of the moves will help the company crank out phones and tablets that are more competitive than those it put out over the last few years.

Heins did finally acknowledge that some fundamental change was needed — something his predecessors had long refused to admit. Even Heins himself suggested, upon taking the helm, that no major shift was necessary.

Those initial impressions, Heins conceded, were not supported by the facts he has since learned in his 10 weeks on the job.

Just what exactly RIM will do differently is unclear. Heins made it clear that nothing is off the table — from licensing the operating system to partnering with another hardware company.

Heins also said that RIM can’t afford to try to be all things to all people.

The question remains, though, what exactly RIM will try to do.

Heins made reference to scaling back on some of the consumer services it had been incubating, and a focus on the company’s strengths around the enterprise and security.

The company also indicated that it will try to survive the time until its new BlackBerry 10 operating system arrives with a line of new low-end devices aimed at international markets.

But the real question is what RIM really has cooking with the new operating system, how quickly it arrives, and whether it is really ready to compete with the iPhone, Android and Windows Phone, all of which continue to rapidly improve in their own right.

The first hint should come in May, when the company offers developers prototype hardware running an early version of the operating system, in an effort to make sure that its app store is not bare at launch.

However, unlike in past calls, RIM says it won’t be giving any specific guidance for the current quarter.

The call is just getting under way. AllThingsD will provide live coverage.

2:04 pm: Call just getting started. We’re still hearing about forward-looking statements and risk factors.

2:05 pm: CEO Thorsten Heins takes over the call.

“I’ve been the CEO of RIM for just over 10 weeks now,” Heins said, noting that he has spent most of that time meeting with various stakeholders and reviewing the company.

“I did my own reality check.”

“It is now very clear to me that substantial change is what RIM needs,” Heins said, striking a different tone than when he initially took the helm.

Plans to refocus on enterprise market, noting that RIM has been late to the “bring your own device” trend, but says RIM is committed to regaining lost share.

BlackBerry won’t try to be all things to all people, Heins said, saying it won’t be focusing on all areas of the consumer market, including media services.

2:09 pm: Heins says RIM will pull back on various consumer services that it had tried to build over the last couple of years. “As a result, we will be looking at ways to scale back these activities,” he said.

2:10 pm: Heins notes that competitive pressure continues to increase as the company lacks products at the high end, including support for next-generation LTE networks.

Most of the company’s strength right now is internationally. Even there, though — particularly on price — is heating up, Heins said.

2:11 pm: Heins notes that some of the things that used to set RIM apart — things like security and BBM — are no longer as highly valued by customers as they once were.

To avoid losing more customers, Heins said the company will heavily subsidize a new line of low-end BlackBerry 7 phones.

However, as RIM said in its earnings release, the company said it won’t try to project how many devices it will sell.

“I recognize these are difficult times for our shareholders, and it is likely the next few quarters will continue to be (challenging),” Heins said.

2:14 pm: Update on BlackBerry 10.

Heins said he has seen the software running on what will be the hardware that launches toward the end of the year.

“I have to say I am very pleased with the progress they are making,” Heins said.

The company plans to offer some developers prototype hardware and software at a May developer conference.

The company also now has one million PlayBook tablets in the market, Heins said. (Thanks, of course, to steep price cuts.)

Heins said RIM expects BlackBerry 10 devices to enter carrier testing in the summer, in order to hit the market later in the year.

2:17 pm: Heins said he believes that the company’s best shot remains turning its core business around.

“This is not without risk and challenges, and there are no guarantees of success,” he said.

However, RIM is also looking at other areas, such as licensing its technology.

It is difficult to say what kinds of opportunities might arise, Heins said.

2:20 pm: Heins said, in looking at RIM’s organizational structure, it was too complex and there was a lack of accountability.

“We will implement plans to enable our employees to be more effective and grow inside RIM.”

Two employees that won’t be growing inside the company are David Yach and Jim Rowan, who are leaving RIM, as announced earlier in the day.

RIM is looking to hire a new chief operating officer, Heins said.

RIM is also looking for a new chief marketing officer, and is in the process of trying to hire one.

“I expect to have some news for you pretty soon on that important role,” Heins said.

Heins said he plans to unveil a new organizational structure on Friday.

2:23 pm: “We are making the necessary changes at the company,” Heins said, summarizing his comments.

RIM’s financial performance will continue be challenging for the next few quarters, Heins said, promising an update in the near future. He then hands things off to RIM’s chief financial officer to talk about the company’s numbers.

CFO Brian Bidulka: BlackBerry Bold selling reasonably well, as well as some entry-level products for the prepaid and low-end market. Other models of BlackBerry 7 not selling so well, he added, resulting in a charge to earnings.

U.S. sales were 17 percent of quarterly revenue, down from 20 percent.

The company has shipped a total of 1.3 million PlayBook tablets through the end of its fiscal year.

2:27 pm: Bidulka going through the other numbers now. Inventory was down on an absolute basis, but is higher than ideal when you consider current sales rates.

2:30 pm: After the end of the quarter, the company recorded a noncash goodwill charge of $346 million, after tax.

2:32 pm: RIM plans to reduce the number of production facilities as part of a wide-ranging effort to cut costs, Bidulka said.

2:33 pm: While it isn’t giving specific guidance, Bidulka did offer a few expectations.

He said RIM expects smartphones to continue to face margin pressure.

The company sees subscriber levels to be under pressure in the U.S., with any gains coming from international markets. Overall subscriber growth also won’t match last year’s levels, he said.

2:37 pm: On to Q&A.

First question on whether RIM plans to continue making phones at all segments of the market. Also, has the company considered shutting down hardware entirely.

Heins: The world is not in one state, Heins said. Asia Pacific still needs entry-level products, for example.

Too early to say what it will do with BlackBerry 10, he said, though the goal is to make it a high-end aspirational device.

Could mean RIM continues to make hardware itself or, potentially, partners. That, Heins said, is something RIM plans to evaluate.

“We need to look at this. We will leave no stone unturned,” Heins said, promising all avenues will be explored.

2:40 pm: After-hours, by the way, RIM shares are off 23 cents, or 1.7 percent, to $13.50.

As for consumer services, Heins said RIM will look to work with established companies to make BlackBerry 10 competitive.

“We will partner,” Heins said. “We will have to have table stakes” services, he said, but RIM doesn’t need to do those itself.

2:45 pm: Heins reiterates that RIM will look at whether it needs to license BlackBerry 10 operating system or partner with a hardware maker.

“I want to be in the mass-market, I want to participate,” Heins said, but the business model has to make sense.

A sale of the company “is not the main direction we are pursuing right now,” Heins said.

2:50 pm: Heins acknowledged that his tone has shifted, saying, the impression he had of RIM at Day 2 as CEO is different than the facts he sees 10 weeks into the job.

“There’s a lot of learning,” he said.

2:51 pm: “This company needs to learn to partner,” Heins said. “We can’t do everything ourselves, but we can do what we are good at.”

2:56 pm: On to last question — asking for more details on the guidance the company isn’t giving.

Not surprisingly, RIM isn’t giving a lot more details.

And with that, the call wraps up.

“As I complete my retirement from RIM, I’m grateful for this remarkable experience, and for the opportunity to have worked with outstanding professionals who helped turn a Canadian idea into a global success,” said Jim Balsillie.

Also out are Software CTO David Yach, and Jim Rowan, COO, Global Operations.

The moves come amid continued turmoil at the company, which is aiming to transition from its current BlackBerry operating system to a new QNX-based one similar to that used on its PlayBook tablet.

RIM CEO Thorsten Heins said that he has identified lots of strengths in the company since taking the helm in January, but cautioned that “notwithstanding these strengths and opportunities, the business challenges we face over the next several quarters are significant.”

Even as it continues to work toward delivering phones based on the new operating system — and on server software to manage rival smartphones — RIM said it is also looking at other options, including “partnerships and joint ventures, licensing, and other ways to leverage RIM’s assets and maximize value for our stakeholders.”

The company reported sales and earnings below an already chopped forecast issued in December. Analysts had projected a brutal quarter, although Thursday’s numbers were below even their consensus figures.

Adding to the gloom, RIM said on Thursday that it “expects continued pressure on revenue and earnings throughout fiscal 2013,” and said it will no longer offer specific earnings guidance, “due to a desire to focus on long-term value creation and the current business environment.”

Canada’s Globe and Mail had reported on its Web site that high-level departures had begun earlier on Thursday.

RIM said it shipped roughly 11.1 million BlackBerry smartphones in the last quarter, down 23 percent from the prior quarter, along with 500,000 BlackBerry PlayBook tablets.

Analysts had been forecasting a grim quarter for some time now, and RIM did them proud, soundly missing estimates for the fifth time in a row and announcing plans to stop issuing guidance as well.

And as if that weren’t enough, former co-CEO Jim Balsillie has resigned from RIM’s board, and its CTO and COO are stepping down.

What a train wreck.

For its latest quarter, RIM reported a net loss of $125 million, or 24 cents a share, compared to net income of $934 million, or $1.78 per share, for the same period last year. Earnings on an adjusted basis were 80 cents a share for the period. And revenue slipped 25 percent to $4.19 billion.

Analysts had expected RIM to post earnings of 83 cents a share on revenue of $4.56 billion for the period, so this was an ugly miss. Making matters worse, BlackBerry shipments were just 11.1 million units for the past quarter, well below what many analysts had been hoping for, and at the lower end of RIM’s own guidance. The company said it shipped about 500,000 PlayBooks, which is more than it shipped last quarter, but still disappointing.

Today’s earnings were the first reported under the leadership of CEO Thorsten Heins, who took over from co-CEOs Jim Balsillie and Mike Lazaridis in late January. And while Heins at first seemed like he would simply follow his predecessors’ lead, he’s clearly bringing a more critical eye to the company.

In RIM’s earnings statement today, Heins said that while the company has many opportunities, it also has a daunting few quarters ahead of it.

“The business challenges we face over the next several quarters are significant, and I am taking the necessary steps to address them,” he said. “In addition to delivering the BlackBerry 10 platform and refocusing resources on RIM’s key opportunities, such as BlackBerry Mobile Fusion and new integrated service offerings, we will also drive greater operational performance through a variety of initiatives, including increased management accountability and process discipline. In parallel, we are undertaking a comprehensive review of strategic opportunities, including partnerships and joint ventures, licensing and other ways to leverage RIM’s assets and maximize value for our stakeholders.”

No doubt Heins will have quite a bit more to say during RIM’s earnings call. Check out Ina Fried’s liveblog for coverage of that.

Those who attend the BlackBerry 10 Jam in Orlando will also get an early developer prototype running the code. However, RIM stressed that this is not the first BlackBerry 10 smartphone, and that both the software and hardware will be different from what eventually goes on sale.

“This is not a BlackBerry 10 smartphone — it is a prototype running a modified version of the PlayBook OS which will help developers design their apps for the BlackBerry 10 smartphone form factor,” RIM said in a statement. “It’s not the final hardware or OS — it’s a device to help developers get started with designing for what’s coming.”

The device won’t be sold commercially or given to other attendees of the broader BlackBerry World.

“There is limited capacity for BlackBerry 10 Jam, so developers should register as soon as possible to be part of this amazing opportunity,” RIM said.

In a post to RIM’s official blog, Adrian Stone, director of the company’s BlackBerry Security Incident Response Team (BBSIRT), explains — in painstaking detail — RIM’s position on “jailbreaking,” a procedure some tech-savvy consumers use to extend the functionality of devices whose operating systems are tightly controlled by their manufacturers. Its headline: Don’t do it.

And if you do do it? Well, then, you’re on your own if things go south for you.

“RIM recommends against installing any jailbreaking tool,” Stone wrote. “Customers who use a jailbreaking tool on BlackBerry products void the manufacturer warranty and also increase the long-term risk of negatively impacting the stability and user experience of their BlackBerry products.”

Not a surprising position for RIM to take. Rivals like Apple have had similar policies for years. But then, Apple needed one almost immediately after launching the iPhone in 2007. Evidently, RIM hasn’t until now, when the homebrew community has taken to meddling with the PlayBook via jailbreak tools like Dingleberry. Which is a good sign, I suppose, given the device’s lackluster sales.