BlackBerry continues to bleed red as it takes a massive hit for the unsuccessful launch of its first all-touch Z10 smartphone. However, it continues to reposition itself as both a company and a smartphone/services player, with several options still available that could see it emerge as a niche but revived vendor.
Losing Ground, Share and Users
Nothing but bad news continues to pour out of BlackBerry, with the company reporting a big loss thanks to a hefty $900 million plus writedown, mostly for unsold Z10 stock. That comes on top of its renewed focus on the enterprise, amid an uninspired app line-up and the delayed launch of its BBM service on rival platforms. It has cancelled its investor call for today's earnings report which revealed a bleak revenue figure of $1.6 billion and an adjusted loss of $248 million (GAAP operating loss of $965 million, link to its PDF).
As suggested in its last quarter's results, The Z10 failed to find buyers out on the streets and malls, and BlackBerry is now focusing on its own salvation, with an attempt to go private seen as the best way of keeping the company running. That's via a $4.7 billion buyout via the Fairfax Consortium, although it remains open to other options.
While the company has a more rounded device line-up thanks to the Q10, Q5 mid-range device and the upcoming large-screen Z30, it has largely failed to attract key developers and the consumer devotion that drove it to past success. Despite all that, the company still has $2.6 billion in cash to see it through to some sort of conclusion, and its heartland among enterprise users, and to a lesser extent, some emerging markets, could well see it live on through its BBM and BES 10 roll outs. But expect the company to vanish among the smartphone market share also-rans in short order.
The Writing on the Wall
While there was always a streak of wild optimism about the company's massively delayed charge into the smartphone era with BB10, it now seems the consumer-focused effort was doomed to fail. If BlackBerry had maintained its enterprise-first focus, it could have avoided the massive costs involved in consumer launches, and led with a tightly-focused business ecosystem.
With the company's original devices finding success in business first, and then becoming a consumer toy, it now seems odd for the company to tackle its reinvention the opposite way around, and has found out the true cost of such an effort.
By going back to this enterprise focus, there's a slim chance it could turn things around. However, with its hardware partner Jabil Circuit looking to leave its production deal (following on from RIM being dumped by Celestica last year), its days as a hardware player could still be numbered. Any hope from evangelists and advocates that the good old days will be back again can be consigned to history.
What do you think? Even if BB10 had launched with a heroically specified halo device at a great price, or its whole range on day one, would it have made any difference? But for now, let's hope that something good comes out of its current issues.
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