Blackberry reports another massive loss, shifts focus to budget devices in emerging markets

By on December 20, 2013, 12:00 PM

There’s no stopping Blackberry’s downfall it seems. The struggling Canadian firm reported a massive $4.4 billion loss and a 56% drop in revenue to $1.19 billion for its third quarter of fiscal year 2014, after factoring in a massive inventory write-down and other one-time charges. In all, the company sold 1.9 million smartphones, down from 3.7 million during the second fiscal quarter, and most of them were older Blackberry 7 devices.

This year's launch of Blackberry 10 was supposed to breathe new life into the brand and lure customers away from rivals -- or at the very least keep existing ones from fleeing. But the hardware lineup failed to impress and Blackberry’s limited app catalog made the platform a tough sell.

Excluding the inventory writedowns and impairment charges, the loss was still $354 million, or 67 cents a share.

The company isn’t ready to call it quits, however. After a failed buyout bid led by FairFax Financial in November, a management shakeup saw Thorsten Heins leave his post as chief executive, replaced by John Chen as interim CEO and chairman of the board until a permanent replacement can be found. Furthermore the focus is no longer on a full or partial sale but rather making Blackberry a strong player in the mobile market once again.

Chen, who is credited with returning Sybase to profitability in the 2000s, admits that turning Blackberry around would be his most complicated challenge to date but said the company has $3.3 billion in cash to engineer their comeback. He believes Blackberry "has a really good shot" of turning a profit in 2016

Going forward the company is putting more emphasis on Blackberry's software business than its hardware business. They also also announced a five-year partnership with Foxconn to develop and manufacture a handset for Indonesia and other emerging markets. The idea is to leverage Foxconn's scale and efficiency to have a break-even or low margin device business that can then be monetized through software.




User Comments: 11

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Guest said:

I think they took to much time to react to the iphone, the galaxy and andriod.

Guest said:

Come on Techspot, have your people read before they post.

and a 56% drop in revenue to $1.19 billion for its third quarter of fiscal year 2014,

Are we not still in 2013???? or maybe Blackberry is so advance that they are in the future ;-)

thelatestmodel thelatestmodel said:

"Are we not still in 2013????"

- A fiscal year starts and ends at a completely different time to a calendar year, so the article is correct (depending on the country and company, of course). Their fiscal year probably ends in early 2014, so it would be the 2013/2014 fiscal year, shortened to just 2014.

As for Blackberry, well, no surprises there. The phones are actually pretty good, especially for business use (I have a Z10 from work). It's just that they simply can't compete with iOS, Android, and Windows Phone. All three are better, so there is literally no reason for anyone to go with Blackberry.

Guest said:

I am sorry thelatestmodel, but you dont read also.

- A fiscal year starts and ends at a completely different time to a calendar year, so the article is correct (depending on the country and company, of course). Their fiscal year probably ends in early 2014, so it would be the 2013/2014 fiscal year, shortened to just 2014.

for its third quarter of fiscal year 2014

If you take time to read you will see THIRD quarter of fiscal year 2014.

Guest said:

third quarter of fiscal year 2014

Guess you dont read much either.

thelatestmodel thelatestmodel said:

third quarter of fiscal year 2014

Guess you dont read much either.

Sorry, was this aimed at me?

Guest said:

Techspot writers seems to be getting sloppy lately.

Guest said:

[link]

When is BlackBerry's fiscal year-end?

BlackBerry's current year, fiscal 2014, will end on March 1, 2014.

Staff
Jos Jos said:

Yes Guest, third quarter of fiscal year 2014.

[link]

thelatestmodel thelatestmodel said:

Wow. Can we get some moderation in here Techspot?

Moderator note: If you see objectionable material, please do not quote it or respond to it. You're just spreading the material all the more. It also creates more work for moderators since they will have to delete your post as well. If you find objectionable material, use the Report function while in forum mode.

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