Blackberry confirmed yesterday that they will be exiting the consumer market after announcing their preliminary fiscal 2014 results.
Losses were reported to have amounted up to $950 million, a large part due to the stagnant pile of Z10 inventory as a consequence from the increasingly competitive smartphone market, and another portion due to their previous restructuring costs. The company also projected a hardware estimated revenue of only 3.7 million, mostly attributing to the sales of Blackberry 7 devices as the Z10 has not reached all consumers yet.
Just last year, Research In Motion Limited’s managing director of global sales and regional marketing was insistent about clearing the misconception about the Canadian firm’s withdrawal from the consumer market.
“Whilst we announced plans to refocus our efforts on our core strengths, and on our enterprise customer base, we were very explicit that we will continue to build on our strengths to go after targeted consumer segments. We listed BBM, as well as the security and manageability of our platform, amongst our strengths,’’ he said in an email response.
This statement might have made a few market observers feel guilty of their pessimistic view, but many were still sceptical about the company’s plans to return into their reigning position. The company’s structure was often under scrutiny, with their initial dual-CEO structure that provided divided directions for the company.
The once market leader of smartphone messaging who once owned more than half of the United States smartphone market now declares plans to lay off 4,500 employees, reducing almost a third of their present workforce. It also announces its future to focus more in the prosumer and enterprise market segment.
President and CEO of Blackberry, Thorsten Hein, stated,
“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. Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability.”
The launch of the new iPhone this week is possibly making this withdrawal from the consumer market even sourer for Blackberry, but it is about time they focus on their niche as a reputable software provider, which they have proved to be with many non-Blackberry devices, such as Nokia, Sony Ericcson and HTC, still running on the company’s server.
As a blackberry fanatic for many years, I fell so much in love with the QWERTY keyboard and their dependable email client service ever since my first curve. Now an Andriod user, I must say this: Once you have tasted the Blackberry, you will never want to taste the others. To blackberry users, give the Android time and you will discover its different beauty.
As for Blackberry Messenger addicts, rejoice! The company announced today that it will no longer keep BBM exclusive and the application will soon grace the Google Play Store and Apple Store very soon as a free app.
Update as of 24th September 2013:
Blackberry has signed a Letter of Intent to be bought over by an association led by Fairfax Financial Holdings Limited Monday. This agreement will come with a transaction of USD 9 in cash per share to all shareholders which will amount to an approximate total of USD 4.7 billion. Fairfax announced that it will privatise the company, taking into account conditions such as due diligence and negotiation by parties involved.
Prem Watsa, Chairman and CEO of Fairfax, said,
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees. We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”
Although all these sound daunting for Blackberry, it is without a doubt that their secure enterprise service is their strongest offering that can sustain them through this crisis. Way to go, Blackberry!
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