Will BlackBerry pull out of its dive?
BlackBerry, the mobile phone company which was once the darling of the Canadian tech industry, is still struggling, it seems. The company released its latest quarterly results at the end of June, and this week, it spend a lot of its annual general meeting defending itself. Is the beleaguered firm going to make it?
Thorsten Heins, Blackberry's CEO, spent a lot of the Q&A at the general meeting fending off shareholder questions about the firm's misfortune.
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The company reported an $84 million loss in its most recent results. That's a big problem, because earlier this year, it launched its BlackBerry 10 operating system, along with two new phones – the Z10 and Q10 - specifically built for it. This was the first quarter to give us clear data about how the phones were selling, and it was pretty disappointing. The firm sold 2.7 million BlackBerry 10 devices during the quarter, and its revenues didn't meet analyst expectations. It also lost $84 million. This was meant to be BlackBerry's big splash.
The company didn't break out sales of the Z10, but one shareholder called the phone's launch a disaster. "I talked to staff at many points of sale and they were either inadequately trained or not trained at all," he said. "Marketing materials were missing." (Hein's response: no, it wasn't).
BlackBerry's share of the US market is still horribly small – Comscore says it has just 4.8% of the mobile operating system market down there, compared to over 50% for iOS. No wonder that rumors are emerging of layoffs in the company, beginning with its US chief.
One activist investor who has long called for the breakup of the company asked again: "could you touch on whether your strategic analysis has led you to some conclusions?" he asked.
Heins replied that the company is in the middle of a three stage transition. The first stage, which happened last year, was simple survival. It had to avoid going bankrupt. The second stage, which it is currently in, sees it consolidating position and getting new products successfully adopted by the market. The third stage will see it gain profitability, he said.
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But Heins is an operations guy, from an operations background. Steve Jobs captured the mobile market because he was a visionary, which is why he innovated first, and left BlackBerry playing catchup. Jobs invented the tablet computer as we know it today. Heins spends a lot of his time predicting its death, as he apparently prepares to kill off the ill-fated Playbook tablet. Meanwhile, Gartner says that tablets will outstrip sales of pretty much everything else combined, other than smartphones, within four years.
BlackBerry may have a loyal following in Canada, but it needs all the help it can get to crack that crucial and ever-elusive US market. Is it going to succeed? What do you think?Danny Bradbury, MSN Tech & Gadgets