BlackBerry announce massive losses and delay the launch of BBM for Android and iPhone.
Update: BlackBerry have agreed in principle to being bought out by it's largest shareholder Fairfax Financial for $4.7bn (£3bn). They are still open to further offers while negotiations are ongoing.
The launch of the flagship BlackBerry Z30 should be a happy time for BlackBerry, but it’s done little to remedy the increasingly tough situation the company has found itself in.
BlackBerry has announced that it expects a Q2 2014 operating loss of close to a billion dollars, as a result of the BlackBerry Z10 and Q10 failing to sell. This announcement has of course led to share prices dropping. In order to try and cut costs and salvage its business, BlackBerry has further announced that around 4,500 jobs will be cut over the next year.
Other attempts to become profitable include dropping the price of the BlackBerry Z10 (which makes sense anyway now that the Z30 is here) and in future cutting its number of devices on the market down from six to four- two high end ones and two low end ones. In all likelihood that would mean one QWERTY and one pure touchscreen device at each price point, though BlackBerry hasn’t specified.
Any new devices for the time being will be aimed at ‘enterprise and prosumers’, in other words businesses and other professional users, rather than the general mainstream smartphone market. For better or worse that sounds a lot like a return to the BlackBerry of old.
BlackBerry has also been considering selling the company, or at least parts of it, but while that’s certainly a possibility this latest announcement will hurt its chances of even being able to do that.
As if things weren’t already bad enough for BlackBerry, the company has now announced that it’s delaying the launch of the BBM app for Android and iPhone. There’s no word on exactly when it will be available, just that it won’t be launched until it’s ready. The iPhone app was briefly available in some regions and if you already have the app it should still work, while an unauthorised version of the Android app, which was posted online, will be disabled by BlackBerry.
The silver lining to all this is that while the BBM app was available it generated enormous interest, with over 1.1 million users in just the first 8 hours and that was without the Android version even being officially launched. If that interest can be sustained once the app launches properly it might be enough for BlackBerry to continue to operate on a smaller scale as a software/app maker, but right now the future of its hardware business isn’t looking so bright.
The BlackBerry Z30 could still turn things around for the company if it sells in sufficient numbers, but given the failure of the BlackBerry Z10 before it to do so it doesn’t look particularly promising, while BlackBerry’s announcement that it’s refocusing on business users almost comes across as if it’s abandoned the mass-market friendly BlackBerry Z30 before it’s even had a chance.
By Simon Thomas on 24th September, 2013