Blackberry has been on the ropes for some time. After almost single-handedly creating the smartphone industry (along with Palm) the company ruled the roost for several years, only to be upstaged dramatically by Apple’s iPhone, then by a spate of phones running Google’s Android operating system. Blackberry has been losing market share steadily ever since.

Part of the problem has been a consistent failure to produce competitive products. Attempts at a mulit-touch smartphone had less than stellar results, while the PlayBook tablet was effectively a bust. Fans and investors had been holding out hope, however, that the upcoming Blackberry 10 would be the company’s salvation. Last week, however, RIM’s CEO announced that the launch was delayed, and that the phone would not be available until late 2012. RIM cited the need to wait for new dual-core processors for the device to become available.

Now, however, BGR is reporting that the Blackberry 10 is simply not working. They cite a “most trusted source” who says that RIM was flat-out lying about waiting for the new chipset, and that the Blackberry 10 was simply a lousy device that would not even have been able to compete with earlier versions of the iPhone and Android, much less Apple or Google’s latest and greatest.

If BGR’s source is correct, this could have serious implications for RIM. A failed attempt at a new smartphone at a time when Apple and Android are already ascendant could push Blackberry out of the smartphone/tablet market for good. There have been some indications that RIM might be aware of this fact, and may be beginning to position itself for a transition into primarily software-based solutions company. The company announced last month that it was developing Blackberry Mobile Fusion, a software platform that would integrate RIM’s vaunted security features with iOS and Android devices.