BlackBerry, the company formerly known as Research in Motion, has hit another disappointing bump as the company announced an $84 million loss on Friday, despite the announcement of the BlackBerry Z10 and Q10, as well as a new mobile operating system.
BlackBerry's stock on Monday was down 2%, to just over $10.
"We're only five months in," said president and CEO Thorsten Heins, who asked investors for a little more time to introduce the public to the company's newest offerings, noting that the new BlackBerry 10 phones aren't yet available in all U.S. markets, and that the Q10, equipped with the physical keyboard that has become a staple for so many of the company's older corporate base, only recently went on sale.
But many are skeptical. The company sold just 6.8 million phones in the first full quarter since the BlackBerry 10 launched, but only 2.7 million of those were the latest models. The company declined to answer how many of that 2.7 million had actually been sold to customers, as opposed to sitting on store shelves, prompting some analysts to expect that the real number could be as low as 2.3 million devices put into the hands of clients over the last quarter.
"When people are actually happy with the numbers," said Forrester Research analyst Charles Golvin, "they'll tell you the numbers."
As The New York Times pointed out, that means "Apple sells as many iPhones in a week as BlackBerry 10s were shipped over three months." Many have noted that if customers aren't enthused about a product at the beginning of its launch, it's tough work winning them back over a longer period of time.
The company still made $3.07 billion in revenue, up 15% from the $2.8 billion during the same quarter a year ago. And they still have $3.1 billion in cash with no substantial debt. But their market share has taken a cataclysmic fall over the last few years, from 55.3% of the U.S. smart phone market in 2009, to just 0.9% of the market today. As just about everyone knows, this is due in large part to the explosion of Apple's iPhone, followed by Google's Android platform — both of which have made it big in part by ditching the BlackBerry-standard physical keyboard for more versatile full-glass touch screens.
So, what can BlackBerry do? Ups and downs certainly aren't new for technology companies, and there were certainly more than a few who wrote Apple off for dead in the 1990s. And to its credit, BlackBerry has taken a substantial risk (and an appealing one) by hiring pop star Alicia Keys as Global Creative Director, attempting to revamp the brand around a younger, creative, and increasingly female fan base. If it pays off it could be big. They could re-invent the brand around working women, professional mothers, and young creatives. Or, they could disenfranchise the last staid niche that still uses their phones — the old-school white-collar efficiency fanatics who, ironically, were the first to have led us into a smart phone world.
Now many of them have left for smarter phones, and BlackBerry's playing catch up. And they've taken a gamble, choosing to try and capture a new class of customer rather than chase after the older ones — those same executives who have grown weary of outrageous enterprise server fees, and are cautious of looking obsolete when dealing with younger clients.
"The fact is," said one systems administrator, speaking anonymously, "nobody likes it anymore. They don't like using technology that they feel is old because they feel that reflects negatively on them in front of clients." And that, more than any quarterly announcement, might just be the death knell for BlackBerry.
Alicia Keys announcing a new BlackBerry scholarship.