BlackBerry operating loss nears $1 billion for Q2, focus now on enterprise
Beleaguered Canadian manufacturer BlackBerry announced on Friday that it expects to report an operating loss of nearly $1 billion for the second quarter. The company has decided to give up chasing iOS, Android and Windows Phone and will concentrate on the enterprise part of the industry, a sector where BlackBerry's name still carries some cache. Much of the loss can be blamed on the first BlackBerry 10 model, the all-touch BlackBerry Z10. The company is taking a pre-tax write down on the phone of $930 million to $960 million for the second quarter.
Before the announcement, BlackBerry's shares had dropped as much as 24% to $8.01. Trading in the stock was halted late Friday and will resume on Monday. As part of its new focus on the enterprise, BlackBerry will layoff 4500 employees or 40% of its workforce before the year ends.
It really was no surprise that the Canadian OEM was considering giving up on the consumer end of the business. The company is rolling out its popular BlackBerry Messenger social networking app to iOS and Android users starting today. But the most embarrassing news on the consumer front is that BlackBerry shipped only 3.7 million smartphones in the three month period, and most of those were running BlackBerry 7, the company's older OS. So what will happen to the launch of the BlackBerry Z30, which was just announced on Thursday? As we stated on Thursday, the first 5 inch 'Berry appears to be the swan song for the BlackBerry name
Will another company buyout the BlackBerry consumer business? Microsoft is said to be interested. Over the last three months, the number of BlackBerry Enterprise Servers installed has jumped from 19,000 to 25,000 which is an indication why the Waterloo firm could very well succeed in the enterprise niche of the smartphone market. The bottom line is that BlackBerry never read consumers that well at all.
source: BlackBerry via USAToday
"We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability." - Thorsten Heins, CEO, BlackBerry
Will another company buyout the BlackBerry consumer business? Microsoft is said to be interested. Over the last three months, the number of BlackBerry Enterprise Servers installed has jumped from 19,000 to 25,000 which is an indication why the Waterloo firm could very well succeed in the enterprise niche of the smartphone market. The bottom line is that BlackBerry never read consumers that well at all.
source: BlackBerry via USAToday
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