BlackBerry's quarterly results show that sales of the company's BB10 platform and new smartphones aren't as strong as hoped.
BlackBerry 10: Visual Tour Of Smartphones, OS
(click image for larger view and for slideshow)
It turned out to be not the kind of comeback quarter that BlackBerry was hoping for. The company reported its first quarter results for the 2014 fiscal year and the BlackBerry maker reported a loss of $84 million on handset shipments of just 6.8 million.
The company raked in sales of $3.1 billion, but lost 13 cents per share. The $84 million red mark was an improvement over the year-ago period, when BlackBerry lost more than $500 million. Still, investors were expecting a profit for the first quarter, which makes the loss a bitter pill to swallow. Shipments of devices improved 13% overall compared to the previous quarter.
The Z10 smartphone, which launched in February, was available for the full quarter, and the Q10 launched during the middle of the quarter. Despite these new phones and the new platform on which they run, device shipments ran at least half a million short of what investors expected.
Further, BlackBerry provided a breakdown of its handset shipments that is worrisome at best. It is worth remembering that BlackBerry still sells its older BlackBerry 7 models, such as the Bold and Curve, in other markets around the world. According to BlackBerry, it shipped just 2.7 million new BB10 handsets. That means the remaining 4.1 million device shipments were of its older models. Of the 2.7 million BB10 phones shipped, BlackBerry didn't say how many were the Z10 and how many were the Q10. Perhaps most telling, these numbers reflect sales to the channel, not sell through to customers.
By way of comparison, Samsung sold more than 10 million Galaxy S4s during the first four weeks it was available. AT&T alone reported about 4.8 million iPhone sales during the first quarter.
BlackBerry's overall subscriber base fell for the second quarter in a row. It dropped by 4 million, leaving the existing total user base at 72 million. It had been as high as 80 million a year ago. The loss of users overall shows that the company is still losing momentum despite the launch of BB10.
Other bullet points coming from BlackBerry's earnings call revealed that the company plans to have no more than six different models available at any one time, and there will always be a BlackBerry 7 model for sale. In fact, the company plans to introduce at least one new BlackBerry 7 device this year. The company is still working to bring BlackBerry Messenger to Android and iOS devices, but has no firm date for its arrival. BlackBerry confirmed that it will not update the BlackBerry PlayBook tablet to BB10, as originally promised. Instead, the PlayBook will remain on the PlayBook OS.
BlackBerry's stock price took a huge hit following the news, down by almost 25% ahead of the market open.
BlackBerry CEO Thorsten Heins said the next quarter will mark one of investment, and the company looks to regroup. It has already begun to launch the Q5, a low-cost QWERTY-equipped model, in some markets around the world. Hopefully, the Q5 will help win back some of the market share it has lost to competitors in emerging markets.
How Enterprises Are Attacking the IT Security EnterpriseTo learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
Digital Transformation Myths & TruthsTransformation is on every IT organization's to-do list, but effectively transforming IT means a major shift in technology as well as business models and culture. In this IT Trend Report, we examine some of the misconceptions of digital transformation and look at steps you can take to succeed technically and culturally.