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BlackBerry revenues halve in three months as BB10 and Z10 prove unpopular BlackBerry revenues halve in three months as BB10 and Z10 prove unpopular
(about 1 hour later)
BlackBerry's revenues have halved in three months, with the Canadian smartphone maker now in a tailspin after the failure of its January relaunch.BlackBerry's revenues have halved in three months, with the Canadian smartphone maker now in a tailspin after the failure of its January relaunch.
Following Monday's agreement in principle to be taken private by the Canadian hedge fund Fairfax, BlackBerry said on Friday that revenues had fallen to $1.57bn in the August quarter, from $3bn in June.Following Monday's agreement in principle to be taken private by the Canadian hedge fund Fairfax, BlackBerry said on Friday that revenues had fallen to $1.57bn in the August quarter, from $3bn in June.
BlackBerry's new generation BB10 handsets have left consumers cold, and the company said on Friday it had booked a $934m charge on unsold units of the all touchscreen Z10 smartphone, on which chief executive Thorsten Heins had pinned hopes of a recovery.BlackBerry's new generation BB10 handsets have left consumers cold, and the company said on Friday it had booked a $934m charge on unsold units of the all touchscreen Z10 smartphone, on which chief executive Thorsten Heins had pinned hopes of a recovery.
The sharp decline of BlackBerry's balance sheet, which includes a $965m loss for the quarter, is partly explained by accounting changes: the group is no longer recognising revenue from phones sold into networks and retailers, but waiting until consumers have bought the handsets before counting them as purchased. The sharp decline of BlackBerry's balance sheet, which includes a $965m loss for the quarter, is partly explained by accounting changes: the group is no longer recognising revenue from phones sold into networks and retailers, but waiting until consumers have bought the handsets before counting them as purchased.
In the last quarter, the company recognised hardware revenue from just 3.7m smartphones, most of them older, BB7 devices; this compares with the 6.5m units of Apple's two latest models that analysts estimate consumers paid for last weekend.In the last quarter, the company recognised hardware revenue from just 3.7m smartphones, most of them older, BB7 devices; this compares with the 6.5m units of Apple's two latest models that analysts estimate consumers paid for last weekend.
Heins said: "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. We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company, with $2.6bn in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."Heins said: "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. We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company, with $2.6bn in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."
Revenues in North America fell to $414m, from $761m in the previous quarter. In the Europe, Middle East and Africa region, they fell from to $686m from $1.3bn. Latin America has more than halved, to $196m, and Asia Pacific is down by a similar measure, to $277m.Revenues in North America fell to $414m, from $761m in the previous quarter. In the Europe, Middle East and Africa region, they fell from to $686m from $1.3bn. Latin America has more than halved, to $196m, and Asia Pacific is down by a similar measure, to $277m.
A year ago, Blackberry could count on over a billion dollars a quarter from Europe, and in Asia its income was still growing. Now Heins has signalled a retrenchment from the consumer market, so that the company can concentrate on government and corporate clients, but industry watchers are speculating that the business may have to close its manufacturing arm, auction its patents, and concentrate on software and secure servers. A year ago, Blackberry could count on over $1bn a quarter from Europe, and in Asia its income was still growing. Now Heins has signalled a retrenchment from the consumer market, so that the company can concentrate on government and corporate clients, but industry watchers are speculating that the business may have to close its manufacturing arm, auction its patents, and concentrate on software and secure servers.
The company is up for sale but only one buyer has so far emerged. Fairfax, which has a 10% stake in Blackberry, has offered to take the company private at $9 a share, but has yet to raise the money to fund the deal. Investor scepticism means shares are trading at a discount to the offer, closing on Thursday at $7.95. Confirmation of BlackBerry's second-quarter numbers, which were pre-released last week, sent shares above $8 in pre-market trading.The company is up for sale but only one buyer has so far emerged. Fairfax, which has a 10% stake in Blackberry, has offered to take the company private at $9 a share, but has yet to raise the money to fund the deal. Investor scepticism means shares are trading at a discount to the offer, closing on Thursday at $7.95. Confirmation of BlackBerry's second-quarter numbers, which were pre-released last week, sent shares above $8 in pre-market trading.
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