BlackBerry's (BBRY) Comeback in Doubt as New Phone Sales Fizzle
BlackBerry's efforts to turn the company around with its new BlackBerry 10 software and phones are in doubt after a disappointing earnings report that sent its shares into a tailspin.
The Waterloo, Ontario-based company said today it
shipped 6.8 million smartphones in the last quarter, down from 7.8 million
during the same period a year ago. It posted a loss of 13 cents a share for the
quarter when analysts had anticipated profit of 8 cents a share. The shares
fell 29 percent today in intra-day trading, the biggest loss an over a decade.
However, even more troublesome is that there was no
major boost from its new BlackBerry 10 devices, including the Z10 which
was released in February and its Q10 released in
May. The company only shipped 2.7 million of its new BlackBerry 10
devices, much lower than analysts had predicted. The company did not divulge
how many were actually sold after being shipped to carriers and stores.
BlackBerry 10
and Z10 Review
BlackBerry
CEO on New Phones, Samsung and Apple Watch Video:
BlackBerry
10 and Z10 Video Review Watch Video
Analysts
have called the reports "dismal" and "disappointing,"
especially when looking at the outlook for the next quarter.
"BlackBerry (BBRY) reported
a dismal fiscal first-quarter net loss but the firm's outlook for another loss
next quarter is even more disappointing and indicates that the company's
long-awaited BlackBerry 10 (BB10) launch has been a bust," Morningstar
analyst Brian Colello wrote in his analyst note.
However, CEO Thorsten
Heins, who took over a year and a half ago and has made a series of
changes, including changing the name of the company from RIM to Blackberry,
remains optimistic. "We are continuing on focusing on improving all areas
of the business," Heins said on the company's earnings call this morning.
"I am confident in the future of BlackBerry 10 and we have lots of new
products to be built."
Heins
referenced new products and services coming as well as enterprise support for
BB10 devices. The company has begun to launch its Q5, a lower cost BlackBerry
10 phone, in numerous markets. He urged analysts to be patient and understand
that this is not a sprint but "a marathon."
"It
might be a marathon and not a sprint, but they got off to a pretty terrible
start," Colello told ABC News. He added that the company has the cash to
hang around for a while, he just doesn't see it regaining its 20 percent
marketshare any time soon.
BlackBerry CEO
Interview: Company Aims at Samsung and Apple with BB10
And that's
because of the very large lead of the iPhone and other Android devices. Even if
BlackBerry has created an interesting new product with some features that the
competing devices don't provide, it simply just reacted too late to the
touchscreen smartphone trend.
"BlackBerry
10 was a major improvement, but it was too little, too late," Patrick
Moorhead, an analyst at Moor Insights & Strategy, told ABC News.
"Competition from both Apple and Samsung will keep BlackBerry from any
significant gains at the high and mid-markets, and in the emerging regions,
local, low-cost players are dominating. This doesn't leave a lot of room
for BlackBerry to grow."
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