Ronnie05's Blog

It has been a pleasure. Au Revoir Blackberry!

Posted in Mobile Devices and Company Updates by Manas Ganguly on September 21, 2013

Nokia is selling off. Blackberry is winding down. Too Many other Asian Smartphone Vendors are churning out of business- the seismic level activity in Smartphone Industry is beginning to take its toll

Blackberry’s white knights – Z10 and BB10 haven’t brought the moolah home. In the Q2 pre-released earnings call, Blackberry has said that it will take a $1 billion pre tax hit on the their bottomline. Much of this – about $950-$995 million is to do with unsold inventory of Z10 at Blackberry. Worse there is a 40% workforce cut on the cards. In Q2, Blackberry sold close a 5.7 million units to end customers. BlackBerry is now predicting total second-quarter revenue of about $1.6 billion, compared with Wall Street’s forecast for $3 billion. Interestingly enough the revenue from the BB10 devices has not been accounted for – and all the revenue is mostly from the legacy BB7 platform. I was always skeptical of Blackberry’s comeback attempt with the Z10 and BB10. Always felt that Blackberry was looking at the wrong end of the market to stay relevant.

The good news is that it has a solid $2.6bn in cash and is debt free. The other is that the BBM would be made available to Android and iOS to increase its customer reach.

BB is seeking the current strategic alternatives –
1. Split the company. Spin of BBM as a services group
2. A sell out to a possible suitor for the hardware business – BB becomes a services company

OR

1. Sell out the unit as a whole.

Going forward, BB is not only pruning its workforce but is cutting down its portfolio also, focussing on enterprise and prosumer-centric targeted devices, including 2 high-end devices and 2 entry-level devices in all-touch and QWERTY models. Blackberry is also supposed to be refocussing on end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This means that Blackberry is exiting the consumer market and getting back to its fort- the enterprise.

In any case Blackberry now ceases to be the force it was in smartphones. Blackberry had its moments in smartphone folklore and history – and yet again the example of a mobile phone company – which was out innovated in the game.

Read other posts:
2012: Make or Break for Yahoo!, Blackberry and Nokia
Blackberry share prices fall below book value
Blackberry: Past Perfect, Present Tense, Future Unsure : Part 1, Part 2, Part 3, Reprise

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