Struggling smartphone maker BlackBerry
saw its quarterly revenues fall below $1bn
(£601m) for the first time in seven years in
the three months to March, recording its
ninth successive quarter of operating losses
and ending its fiscal year with net losses of $
5.8bn.
The company recorded revenue on sales of
just 1.3m of its new BB10 phones, though it
sold 3.4m of its older BB7 phones as
customers stuck to the older model that
drove it to success. Operating losses were $
537m, and net losses $423m.
The company's shares moved up 4% in pre-
market trading as the losses were smaller
than had been expected, and revenue in the
US slightly higher than analysts forecast.
John Chen, recruited in November as chief
executive to try to turn the company around,
said he was "very pleased" with progress
and that "we have significantly streamlined
operations, allowing us to reach our
expense reduction target one quarter ahead
of schedule."
He also told Reuters that the company was
working on high-end keyboard-based
smartphones to appeal to "keyboard
aficionados" in the next 18 months.
He is also considering ways to generate
more value from the BlackBerry Messenger
(BBM) software, presently available for free
on BlackBerry, Apple and Android devices.
The purchase by Facebook of messaging
app WhatsApp for $19bn has piqued
interest in the potential of BBM – though the
chief of that division left BlackBerry recently,
and its software chief is heading to Apple.
Despite a cash outflow of $553m during the
quarter, Chen said that the company was on
a "sound financial footing", with $2.7bn of
cash and equivalents.
Chen has laid off staff, sold offices and land,
and outsourced the manufacture of handset
as part of a retrenchment from the
consumer market to focus on its strongest
markets among government and business
users. Operating expenses were halved from
the start of the fiscal year, and the number
of phones sitting unsold with retailers –
known as "channel inventory" – reduced by
a third.
BlackBerry has fallen far from its peak at the
end of 2010, when its revenues hit $5.5bn
in a single quarter and it claimed 80m users
for its platform. Its total revenue for the past
four quarters were just $6.8bn. Though it
was one of the first companies to offer a
smartphone, and leant on its powerful email
encryption as a selling point, the rise of
Apple's iPhone and phones running
Google's Android software has seen its
unique selling points eroded.
The company now faces a problem in
interesting buyers in its BB10 platform,
launched in January 2013 by former chief
executive Thorsten Heins but given a frosty
reception by mobile networks and
customers. Many have preferred to stick
with the older BB7, which has outsold the
BB10 models in every quarter since its
release. Most of BlackBerry's losses for 2014
are due to massive writedowns on unsold
BB10 handsets.
Despite a $1bn debt financing ahead of
Chen's appointment, the company is still
losing key customers among corporations.
However BlackBerry was able to tout the US
Department of Defence having cleared BB10
for use on the Pentagon's networks.
BlackBerry's headline revenues are still
highly dependent on its handset sales, but
those have now fallen to a level not seen
since summer 2006, while the quarterly
revenues were the same as in the three-
month period before the launch of Apple's
iPhone. For the past two quarters the
majority of its revenues have come from
services, where it provides its BlackBerry
Enterprise Server software to corporate
customers to handle BlackBerry handsets.
Meanwhile the company's former consumer
strongholds in the US, UK and Asia all
showed signs of erosion.
saw its quarterly revenues fall below $1bn
(£601m) for the first time in seven years in
the three months to March, recording its
ninth successive quarter of operating losses
and ending its fiscal year with net losses of $
5.8bn.
The company recorded revenue on sales of
just 1.3m of its new BB10 phones, though it
sold 3.4m of its older BB7 phones as
customers stuck to the older model that
drove it to success. Operating losses were $
537m, and net losses $423m.
The company's shares moved up 4% in pre-
market trading as the losses were smaller
than had been expected, and revenue in the
US slightly higher than analysts forecast.
John Chen, recruited in November as chief
executive to try to turn the company around,
said he was "very pleased" with progress
and that "we have significantly streamlined
operations, allowing us to reach our
expense reduction target one quarter ahead
of schedule."
He also told Reuters that the company was
working on high-end keyboard-based
smartphones to appeal to "keyboard
aficionados" in the next 18 months.
He is also considering ways to generate
more value from the BlackBerry Messenger
(BBM) software, presently available for free
on BlackBerry, Apple and Android devices.
The purchase by Facebook of messaging
app WhatsApp for $19bn has piqued
interest in the potential of BBM – though the
chief of that division left BlackBerry recently,
and its software chief is heading to Apple.
Despite a cash outflow of $553m during the
quarter, Chen said that the company was on
a "sound financial footing", with $2.7bn of
cash and equivalents.
Chen has laid off staff, sold offices and land,
and outsourced the manufacture of handset
as part of a retrenchment from the
consumer market to focus on its strongest
markets among government and business
users. Operating expenses were halved from
the start of the fiscal year, and the number
of phones sitting unsold with retailers –
known as "channel inventory" – reduced by
a third.
BlackBerry has fallen far from its peak at the
end of 2010, when its revenues hit $5.5bn
in a single quarter and it claimed 80m users
for its platform. Its total revenue for the past
four quarters were just $6.8bn. Though it
was one of the first companies to offer a
smartphone, and leant on its powerful email
encryption as a selling point, the rise of
Apple's iPhone and phones running
Google's Android software has seen its
unique selling points eroded.
The company now faces a problem in
interesting buyers in its BB10 platform,
launched in January 2013 by former chief
executive Thorsten Heins but given a frosty
reception by mobile networks and
customers. Many have preferred to stick
with the older BB7, which has outsold the
BB10 models in every quarter since its
release. Most of BlackBerry's losses for 2014
are due to massive writedowns on unsold
BB10 handsets.
Despite a $1bn debt financing ahead of
Chen's appointment, the company is still
losing key customers among corporations.
However BlackBerry was able to tout the US
Department of Defence having cleared BB10
for use on the Pentagon's networks.
BlackBerry's headline revenues are still
highly dependent on its handset sales, but
those have now fallen to a level not seen
since summer 2006, while the quarterly
revenues were the same as in the three-
month period before the launch of Apple's
iPhone. For the past two quarters the
majority of its revenues have come from
services, where it provides its BlackBerry
Enterprise Server software to corporate
customers to handle BlackBerry handsets.
Meanwhile the company's former consumer
strongholds in the US, UK and Asia all
showed signs of erosion.
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