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BlackBerry Remains Committed To Smartphone Business, Despite $670M Net Loss In Last Three Months (baytoday.ca)
AchilleTalon writes: BlackBerry CEO John Chen refuses to give up on the company's hardware business despite lackluster sales of its first Android-powered smartphone, the Priv. The Canadian smartphone maker reported a $670 million net loss in the first quarter of its 2017 financial year, but said its recovery plan for the year remains on track. Chen, who has stated the company's No. 1 goal is to make its smartphone device business profitable this fiscal year, said he expects the company's new mobility solutions segment to break even or record a slight profit during the third quarter, which ends Nov. 30, 2016. During BlackBerry's first quarter -- second full quarter to include Priv sales -- the company sold roughly 500,000 devices at an average price of $290 each, he said, which is about 100,000 smartphones fewer than the previous quarter and about 200,000 fewer than two quarters earlier. Previously, the company said it needs to sell about three million phones at an average of $300 each to break even, though Chen indicated that may change as the software licensing business starts to contribute to revenue.
Let's just briefly review why BBRY's stock is at 6.75 a share and plummeting.
1. Lost sight of their market. Very similar to Microsoft in this regard, although lacking the nigh-trillion dollars of off-shore reserves to recover from dumb mistakes. Both companies make all their profit from enterprises, which are usually run by older folks more comfortable with the tried and true rather than the hot new fashions. But both BlackBerry and Microsoft wanted the juicy cut of Apple's revenues that come from teenagers and young adults using sexy devices. Unfortunately they both failed to create anything sexy, so their advertisements featuring people in fedoras and summer dresses dancing to pop music on a table in joy when a new MSFT/BBRY product comes out missed the mark quite a bit, failing to bring in new audiences and alienating their current customers.
2. Compromised security. They might have won a few government contracts by bragging about backdooring their devices in order to assist law enforcement, but they lost just about everybody else interested in security and privacy (for business or state reasons).
3. The Priv. My gosh, what a shitty device the Priv is. More expensive than the Galaxy S6 and the iPhone 6s on release, but with a cheap plastic slide-out keyboard that makes an uncomfortable grinding sound and abysmal camera. Pass.
4. Slow transition to Android. Developers want to push their stuff onto the Apple Store and Google Play Store because that's where the money is; BB10 is an afterthought *at best*. BlackBerry was really, really late to the party on this one; they got Android apps in 2014, but through a compatibility layer through the Amazon Appstore, so with a shitty selection and axed performance. And their first Android device was shite (see #3).
5. Internet shills. Nothing wrecks your credibility faster than paying people to astroturf for you.
It's a shame because BlackBerry had a lot of good things going for them. The physical keyboard and social communications hub are still unmatched. It's unfortunate that they had such crummy executive management.