Blackberry: Going.. Going… May Go Forever | African News – Nigeria News – African Politics

Blackberry has reported a second quarter net loss of $965m (£600m) following a slump in sales.

The company warned investors last week that it would report a loss of up to a billion dollars, due to poor sales of its new smartphones.

It also announced 4,500 job cuts in a bid to stem those losses.

Earlier this week Blackberry agreed to be bought by a consortium led by Fairfax Financial, its biggest shareholder, for $4.7bn (£3bn).

Blackberry said it would continue to explore other options while negotiations with Fairfax continued.

The company’s financial problems came to a head this year following disappointing sales of its new Z10 smartphone.

Sales were so poor that Blackberry had to write off $934m in the second quarter to account for the weakness.


Released in January – after many delays – the phone has failed to enthuse consumers.

The firm reported total sales of $1.6bn compared with $3.1bn in the same quarter of 2012, a near 50% fall.

“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” said Thorsten Heins, Blackberry’s chief executive.

In the second quarter, Blackberry said it sold 3.7 million Blackberry smartphones. That compares with 7.4 million shipments in the same period of 2012.

To put that into perspective, Apple sold nine million of its new iPhone 5S and 5C models on the opening weekend of sales.


In a research note, Colin Gillis from the brokers BGC, said the results were “startling weak”.

He said the company’s plan to focus on corporate customer, might fail.

“While we applaud the decision to focus on retooling the company into a niche enterprise focused business, it seems years too late.

“Just as the consumer business has crumbled, the enterprise business is also in decay in our opinion.

“Given the negative news flow from the company, enterprise customers are likely to shy away from committing to a struggling platform,” Mr Gillis said.

Short History

Once a pioneer and leading light in the smartphone market, BlackBerry is in a potentially terminal downward spiral. The Canadian company, formerly known as RIM, established an iron grip on the enterprise and successfully bridged the gap from pager, to handheld computer, to smartphone.

In the last couple of years Apple’s iPhone and Google’s Android platform have taken over with a combined market share that tops 90 percent. Struggling to arrest a declining user base, amid poor sales of its latest devices, we are now hearing that BlackBerry might sell up.

What better time to look back at the company’s rollercoaster ride over the last three decades?

1984: The formative year

A couple of engineering students, Mike Lazaridis and Douglas Fregin, founded Research In Motion in 1984 in Waterloo, Canada.

The first few years saw the company developing wireless data technology using the Mobitex standard.

RIM enabled wireless communication for point-of-sale terminal equipment, and worked on modems and pagers, paving the way for mobile devices in the future when they were still confined to the

1992: Jim Balsillie joins

Taking a 60 percent pay cut, mortgaging his house, and sinking £160,000 of his own money into RIM James Balsillie bet big on the company when he joined in 1992. He brought the hard-nosed business sense that would complement the engineering skills of Lazaridis. The two would go on to serve as co-CEOs of RIM for the next two decades.

1998: the first BlackBerry

The RIM 900 Inter@ctive Pager launched in 1996. It was a wireless two-way pager which flipped open to reveal a tiny keyboard and an even tinier display. It enabled peer-to-peer messaging, could send faxes, and provided delivery and read receipts.

It was also capable of sending and receiving email, but its successor in 1998, the RIM 950 Wireless Handheld was really the first BlackBerry.

Sporting a patented keyboard design that made it easy to type with your thumbs, the BlackBerry name came from the appearance of the angled keys.

Rave reviews helped RIM to establish a number of important partnerships with companies like IBM, BellSouth Wireless (later Cingular and then AT&T), and Rogers Cantel.

The BlackBerry email service followed in 1999, and then the company listed on the NASDAQ, raising over £150 million. Sales went through the roof and rapid growth followed.

2001: NTP sues RIM for millions

A major patent infringement lawsuit was brought against RIM by NTP and the jury initially ruled in NTP’s favour and awarded £21 ($33) million damages.

RIM fought it, but would lose further ground in the battle and eventually have to settle for £390m ($612.5m) in 2006, although the legal case did highlight the growing popularity of the BlackBerry brand.

In fact, such was its power the U.S. Justice Department decided to weigh in, warning against a network shutdown because of the government’s reliance on BlackBerry.

It had a positive side too: the BlackBerry network provided backup communications in the aftermath of 9/11 after the phone systems in New York and Washington D.C. couldn’t handle the demand.

By the time the case was settled in 2006 RIM had almost 5 million active BlackBerry subscribers and net income of £240 million for the year.

2006: The CrackBerry craze

nitially popular with the business community, by 2006 RIM was attracting major mass market attention. The 7100 “Charm” series marked a new focus on consumers and more features followed in the “Electron” and “Pearl” releases, including cameras, navigation, and chat features.

Dubbed “CrackBerry” in the US because of its addictive nature, the BlackBerry brand was riding high and it looked like nothing could stop the keyboard revolution.

2007: The world at its feet

Apple launched the iPhone at the start of 2007 and it was set to compete with the BlackBerry Pearl, released the year before.

The Pearl was the first BlackBerry with a camera and a media player and was seen by many as the right move to bring RIM’s products closer to the consumer.

The BlackBerry 8800 series and the entry-level Curve would follow later in 2007 to further this claim, with RIM becoming the most valuable company in Canada.

With 10 million subscribers by the end of the year, there was no sign of concern about the iPhone’s potential as a BlackBerry killer, with RIM clearly feeling that functionality was still the most important element to the smartphone buyer.

2008: A Storm begins to brew

Android launched quietly towards the end of 2008, and hot on its heels was RIM’s first touchscreen device, the BlackBerry Storm.

It was up against the iPhone, the HTC Dream, and the Palm Pre. It would be fair to say that the Storm did not compare favourably, with reports of glitches, sluggish performance, and a poor touchscreen experience.

The hugely successful BlackBerry Bold launched the same year, and RIM hit its all-time highest estimated worth at £49 billion.

2011: Not from the ‘how to make tablets’ PlayBook

ndroid launched quietly towards the end of 2008, and hot on its heels was RIM’s first touchscreen device, the BlackBerry Storm.

It was up against the iPhone, the HTC Dream, and the Palm Pre. It would be fair to say that the Storm did not compare favourably, with reports of glitches, sluggish performance, and a poor touchscreen experience.

The hugely successful BlackBerry Bold launched the same year, and RIM hit its all-time highest estimated worth at £49 billion.

2011: Not from the ‘how to make tablets’ PlayBook

The iPad’s success pointed to the potential of the tablet market and RIM decided to produce a tablet of its own.

Sadly, the PlayBook was doomed from the start, largely due to a lack of apps and a clunky interface, and at release it didn’t even have an email or a calendar app.

The form factor, with a 7-inch display flanked by a large bezel, also came in for criticism, although it would prove successful for Amazon and Google in the months to come.

2011: The ‘BlackBerry riots’ and worldwide outages

In the summer of 2011 riots swept across England and BlackBerry Messenger was apparently used to organize them, with the televised media keen to highlight the role RIM’s devices played in, with it transpiring that 37 per cent of the UK smartphone market in poor urban areas had BlackBerrys.

Worse was to come as severe outages for BlackBerry services hit in October 2011, leading to an unprecedented video apology from Co-CEO Mike Lazaridis.

This was small comfort to millions of BlackBerry subscribers who were left without internet access, email, or BlackBerry Messenger service. An offer of free apps as compensation for those affected was met with widespread derision.

2011: The BlackBerry 10 delays begin

Lay-offs, a high profile open letter from a BlackBerry insider criticizing the lack of strategy, the outages, and delays to the new platform all contributed to the pressure that saw Co-CEOs Lazaridis and Balsillie finally step down to make way for Thorsten Heins.

The last roll of the dice was BlackBerry 10. Originally set to launch in 2011, it was delayed into 2012, and didn’t actually arrive until January 2013, when BlackBerry subscriptions had started to decline as users got to the end of their two year contracts and PAYG options from other handset makers became more attractive options.

Launching on the touchscreen Z10, which was soon followed by the more traditional keyboard-toting BlackBerry Q10, the new platform invited an inevitable “too little, too late” verdict from many quarters.

The BlackBerry subscriber base peaked at 80 million in December 2012 and the new platform has not arrested its decline.

2013: The billion dollar bust

The company is now estimated to be worth less than £3.5 billion, which isn’t an insubstantial amount by any means. With a special committee formed to find a buyer able to salvage the power of BB10, it could be that BlackBerry lives to fight another day – but that’s getting harder and harder given the recent financial results.

All those unsold Z10 handsets are burning a rather large hole in the company’s balance sheet, meaning the pile of phones is costing BlackBerry a cool $930 million (about £580m/AU$988m), which means it’s going to be tremendously hard to shift more handsets as consumers struggle to stay loyal to the brand.

The company has also had to postpone its BBM launch on Android and iOS thanks to leaks of the software, but has managed to squeeze out another handset in the shape of the 5-inch BlackBerry Z30, coming with a Super AMOLED screen and everything.

Had this appeared a year ago, perhaps the brand could have made something of a turnaround, but this is starting to look too little, too late for the firm that once led the way in shaping the modern smartphone.

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