BlackBerry Posts Surprise Loss on BB10 Flop; Only 2.7m BB10 Devices Sold in Q2
June 28, 2013 2:47 PM
comment(s) - last by
Analysts expected a modest profit, but underestimated BlackBerry's ability to disappoint
There was a time not so long ago -- 5 or 6 years, perhaps -- when the BlackBerry was viewed as a slick status symbol, a business road-warrior's go to device. But its maker -- the Canadian company formerly known as RIM, now rebranded BlackBerry Ltd. (
) -- can only look helplessly back on those days when its brand image held such cachet.
I. BB10 Looks Like a Flop, Early On
Today BlackBerries are
the bunts of jokes
"When are you going to get a real phone?"
) and worse yet they're just not selling. BlackBerry seemed to give things an honest effort, in January
launching its much-delayed modern operating system makeover
(BB10). And prior to that, last year it had shuffled management, tapping
to be its new chief executive.
But for all that effort, the
[PDF] for Q2 2013 (fiscal Q1 2014) suggest the phonemaker has little to show for it. Two quarters in and BB10 is starting to look like one big flop.
for over 3.5 million BlackBerry 10 devices sold; instead only 2.7 million managed to be sold --
in line with previous estimates
by market research firm Interactive Data Corp. (
, even the struggling Windows Phone platform
passed BlackBerry by
Overall BB sold 6.8 million smartphones,
Worse, BlackBerry bled $84M USD ($0.13 USD/share) -- a surprise loss. Analysts polled by
of around $39M USD ($0.06 USD/share). The analysts expected $3.4B USD in revenue, RIM delivered only $3.1B USD.
The BB10 Q10 (left) and Z10 (right)
But probably the most grim sign for BlackBerry was that only two out of five of its device buyers bought BlackBerry 10 devices.
There were some mitigating factors -- namely, t
he keyboard equipped Q10 variant (a favorite among some die-hards)
wasn't be available till May
Thus expect BlackBerry to chalk poor BB10 sales up to slow carrier rollouts globally or other excuses. But at the end of the day, the fact is that these devices were available on many markets (including here in the U.S.); the Q10 has been on sale for a month, and the Z10 was on sale the entire quarter.
They simply weren't selling; or viewed differently customers didn't appear to feel the Q10 was worth waiting for.
After all the sacrifices, BB10 is coming up short in sales. [Image Source: Unknown]
. Part of that may be due to lack of resources. After
putting so much into its OS push
, BlackBerry may simply not have had enough cashflow to buy ad time and
hire top grade advertising talent
In the company's own words it's facing hardship due to the "highly competitive" nature of the smartphone market. It expects to post a loss in Q2 2013.
II. BB's Best Survival Bet is as a Secured Services Provider
The question is whether it can ever be a viable phonemaker again. Trying to design you own user interface, app ecosystem, etc. is a massively expensive endeavor that only the biggest companies -- Google Inc. (
), Apple, Inc. (
), and Microsoft Corp. (
) -- for the most part dare to do.
All things considered BlackBerry put up a valiant effort with BB10, considering its limited resources. Even with all the delays, BB10 has some very nice features and relatively little in the way of glaring deficiencies. "If it wasn't good enough," CEO Heins and company must be wondering -- "Will anything be?"
The RIMdenberg can't seem to catch a break. [Image Source: Jason Mick/DailyTech LLC]
The answer is likely no.
BB10 was almost destined to fall behind Windows Phone -- the sole surprise was that it did so so quickly. CEO Heins contends, "[BlackBerry customers] an end-to-end solution, including the device."
True, but the worst case scenario is that there may not be that many BlackBerry customers soon. If only ~1m customers bought BB10 handsets, the global user base may dwindle around 20-30m units (assuming a 2 to 2.5 year upgrade cycle). Revenues would be at around $1-1.5B USD. At that level it will be hard to attract developers, and nearly impossible to keep pace with Google, Apple, and Microsoft in OS development.
RIM's stock took a 26 percent hit as shorters and serious investors alike jumped off the ship amidst the grim earnings.
BlackBerry is already starting to transistion to platform agnostic services. [Image Source: BB]
Will BlackBerry die entirely? That's unlikely. It's losses aren't that bad (particularly, given its $3.1B USD cash pile). If it isn't acquired (though
who would be willing to take on this baggage
is a tough question --
)?), it will likely be forced by that "highly competitive" market to become a third party provider of security products -- its service specialty.
It's already quietly
started selling secured business service solutions
for Google's Android and Apple's iOS. It wants the focus to be on BB10 -- but that just isn't working out in its favor. Sooner or later cold hard business realities will be force BlackBerry to become an enterprise service firm and bow out of the hardware market -- no matter how Thorsten Heins and his dwindling brigade of BlackBerry loyalists wish that weren't the case.
This article is over a month old, voting and posting comments is disabled
RE: Too Bad.
7/3/2013 5:49:03 AM
Agree, while I really like my Galaxy Nexus with swype-like keyboard I would also like to have another competing OS's with better battery life, great input, etc
But the division on Apps EcoSphere is killing off any smartphone contenders as market because
market share => apps
and in turn
apps => users
Which is why BB should have been faster to bring top notch support for HTML apps, but their early browsers were very weak. Now BB10 and Firefox OS should work together to create a HTML5 App Store that runs well on both phones OS'es, and has low/zero developer porting effort. <not holding my breath>
"It's okay. The scenarios aren't that clear. But it's good looking. [Steve Jobs] does good design, and [the iPad] is absolutely a good example of that." -- Bill Gates on the Apple iPad
Microsoft: Windows Phone is in Third Place and We're Proud
June 27, 2013, 11:07 AM
IDC: Windows Phone Passes BlackBerry for Third Place in Q1 Shipments
May 16, 2013, 10:50 AM
BlackBerry Q10 Review Roundup; Coming to the U.S. in May for $249
April 24, 2013, 3:40 PM
RIM Posts Another Questionable Video to YouTube
March 19, 2013, 4:37 PM
BlackBerry Offers "Secure Work Space" for iOS, Android
March 14, 2013, 10:51 AM
Retiree Sues Apple For $7,500 for Wiping Honeymoon Photos From His iPhone
November 30, 2015, 10:23 AM
iPhone 7 May Pack 3-4 GB Memory, More Storage; 4-Inch Comeback is Rumored
November 20, 2015, 10:12 PM
OnePlus One, OnePlus 2 Will Receive Android Marshmallow in Q1 2016
November 16, 2015, 9:58 AM
Lenovo Whoa: Motorola Droid MAXX 2 and Turbo 2 Break Cover in Leaks
October 26, 2015, 3:12 PM
Leak: Apple Preps for First Real Android App Foray With New Apple Music App
October 24, 2015, 1:59 PM
Pepsi Smartphone? Empty Calories Coming Soon to the Midrange
October 12, 2015, 11:41 PM
Most Popular Articles
Free Windows 10 offer ends July 29th, 2016: 10 Reasons to Upgrade Immediately
July 22, 2016, 9:19 PM
Top 5 Smart Watches
July 21, 2016, 11:48 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information