BlackBerry’s Struggles: Could a Smartphone Pioneer Shut Down?
With a disastrous quarter and a flop under its belt, BlackBerry (formerly known as Research in Motion) is having a rough run—including on the stock market. Here's what you should know.
It was the company’s great hope, the breakthrough that would put the industry’s first mover back in the running with the big players that had usurped it.
It was a flop.
The BlackBerry Z10, a touch-enabled device meant to modernize the platform in the age of the iPhone and Samsung Galaxy, failed to stem the tide of users moving away from the original smartphone platform—and the company’s quarterly results show it.
The bad news: While the company announced last week an increase in sales of 8.5 percent to $3.07 billion, according to Forbes, this was below the $3.37 billion analysts predicted. (The company also sold about a million fewer BlackBerry 10 devices—2.7 million in total—than analysts expected, CNN Money notes.) As a result, the company saw its stock fall by roughly 28 percent and posted a loss of 13 cents a share (excluding some items) instead of the profit of 8 cents a share analysts had projected. CEO Thorsten Heins asked for patience. “BlackBerry 10 is still in the early stages of its transition,” he said in a conference call. “In fact, we are only five months in to what is the launch of an entirely new mobile computing platform.” But with its brand name struggling to connect with a new generation of smartphone users, some are concerned that this is evidence of a long-term decline for BlackBerry.
The worse problem? Apps: Even if the technology is up to snuff compared to other smartphones, the real problem for the company is that app developers have largely moved to other platforms. Developers would likely stay on for an evolution if the company were doing well—say, as with Apple and iOS7. But the case is much less compelling for BlackBerry, a unique platform with a declining user base. “We specifically chose not to develop for BlackBerry because of the challenges that they were having,” Brian Mack of development house Ideomed told Bloomberg Businessweek. Similar platforms, including Palm’s WebOS and Microsoft’s Windows Phone, have also faced this challenge in recent years, and it might prove a major hurdle for BlackBerry.
So what’s plan B? While the company may not have an easy go of it, BlackBerry does have some strengths, CNN Money reports—including a large array of patents, a robust enterprise solution, a federal government footprint, and a reputation that precedes it in mobile security. With $3.1 billion in cash on hand, BlackBerry could still have some fight left in it, but many analysts suggest that the company may be a possible acquisition target. Its patents could prove especially valuable to other mobile companies, which often face litigation over their innovations.
But for now, BlackBerry is doing what it does best—it’s launching a new model, the Q10, complete with keyboard—something diehards are clamoring for. It’s garnered good reviews so far, though in some ways, it’s a bit of a throwback.
Are you still a heavy BlackBerry user? Think the platform still has some life in it? Let us know your thoughts below.
The BlackBerry Q10 has gotten good reviews, partly due to its usage of a keyboard. (courtesy Blackberry)