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BlackBerry in deep trouble’s: 5000 job cuts and BlackBerry 10 delay

 

 

BlackBerry has released their FQ 2013 released and have dropped a bomb on investor’s and shareholder’s. Hint for such result was already provided by BlackBerry few weeks back.

Shocker Point’s of the result is:

1. Q1 Revenue= 2.8 billion which is 33% down from prior quarter which was $4.2 billion. ( The revenue is down even when BlackBerry overall subscriber base has increased through out world except North America. It clearly reflects that BlackBerry is not operating in the profit zone)

2. GAAP net loss in Q1 is of $518 million.

3. BlackBerry Smartphones shipments were $7.8 million and BlackBerry Playbook tablets were 260,000. (Playbook sales number is pretty low even when BlackBerry introduced massive sales on the prices of playbook)

4. BlackBerry 10 release has been delayed till first quarter of next year. ( BlackBerry 10 is the Smartphone on which BlackBerry is hoping to make a comeback)

5. Subscriber base has not grown in North America which is the strongest market for Smartphone industry.

6. 5000 jobs cut which will save $1 billion for BlackBerry and it is also a part of restructuring.

As per the result BlackBerry has already started the restructuring process of the company. One of the major highlights of this restructuring part is reducing the number of external manufacturing sites from ten to three. BlackBerry will outsource the Global repair operations including management. Global 5000 headcount reduction is also a part of restructure and expected to be complete by the end of this year.

You may like to read: BlackBerry Playbook again goes for Sale?

What went against BlackBerry?

 

In the result released by BlackBerry an interesting statement form the CEO and President Thorsten Heins of BlackBerry

“Our top priority going forward is the successful launch of our first BlackBerry 10 device, which we now anticipate will occur in the first quarter of calendar 2013. In parallel with the roll out of BlackBerry 10, we are aggressively working with our advisors on our strategic review and are actively evaluating ways to better leverage our assets and build on our strengths, including our growing BlackBerry subscriber base of approximately 78 million, our large enterprise installed base, our unique network architecture and our industry leading security capabilities.”

The result specifically points out that situation will be same or worsened in the coming quarters.

There can be many reason due to which BlackBerry 10 launch has been delayed. Primarily I think that BlackBerry want’s to see the iPhone 5 which will be launched in the coming months. BlackBerry didn’t have to compete with iPhone but it has to compete with iPhone 5 and the amazing ecosystem of latest iOS. I always point out that iPhone is in its fifth version where as many player like Blackberry are introducing their first product which will compete with iPhone.

We can also expect in coming months some interesting announcement from BlackBerry related to the BlackBerry enterprise and messaging services. The biggest fight for BlackBerry will be to introduce the product and services which will allow them to operate in profit zone. It is tough to accept but in last five years Smartphone hardware’s sale has become bloody. Profit has already moved some where else which is ” What You are selling through your Smartphone ecosystem”.

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