News by Andrew Kameka on Friday September 27, 2013.
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As expected based on the disappointing news released last week, BlackBerry today announced that it generated $1.6 billion in revenue but had an operating loss of $248 million. However, the losses increase to $965 million because of its plan to charge $934 million worth of unsold inventory. BlackBerry's revenues fell 49 percent compared to money generated in the previous quarter, and 45 percent compared to the same period in the previous year.
BlackBerry's woes are related to the poor performance of its BlackBerry 10 devices. Despite banking on a new generation of software and hardware to survive in an Android and iPhone dominated market, the BlackBerry Z10 and Q10 failed to gain enough traction with consumers to strengthen the company. Only 3.7 million smartphones were sold in the recent quarter, and most of those sales were for devices running the older BB 7 OS.
The revenue breakdown includes 49 percent hardware, 46 percent services, and 5 percent software. The hardware struggles have left BlackBerry with hundreds of millions of dollars with unsold devices and encouraged the company to abandon the consumer market. BlackBerry has also entered into a preliminary agreement to sell to Fairfax Financial for $4.7 billion.
BlackBerry canceled its earnings call scheduled for today but CEO Thorsten Heins issued the following statement in its earnings release:
"We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure. While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10, where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013.
"We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."source: BlackBerry
Andrew is based in Miami, Florida.