BlackBerry reports Q1 loss

BlackBerry reports Q1 loss

01 JUL 2013
Thorsten Heins

BlackBerry last week announced another quarterly loss, as it struggles to deliver on its turnaround plan following the launch of its first devices powered by the new BlackBerry 10 operating system.

In the company’s conference call, Thorsten Heins, its CEO, said that “we’re only five months into what is the launch of an entirely new mobile computing platform”.

For the quarter, the company reported a loss of $84 million, compared with a prior-year loss of $518 million, on revenue of $3.07 billion, up from $2.81 billion.

BlackBerry said it had shipped 6.8 million smartphones, up 13 per cent from the previous sequential quarter. Of these, “approximately 40 per cent” – around 2.7 million units – were powered by the new BlackBerry 10 platform.

As the company rolls out more devices powered by BlackBerry 10 – it has announced the Q5, Q10 and Z10 smartphones – Heins said that “current and upcoming products in our portfolio will allow us to address different market tiers”.

However, he also highlighted that “our goal with our smartphone portfolio is to have no more than six new devices in the market at any given time”.

While the intention is to move fully to BlackBerry 10 in due course, he also said that “we still intend to launch one additional product this year to support the BlackBerry 7 segment as well”.

Heins also signalled the end of the company’s PlayBook tablet product line, stating that “I am not satisfied with the level of performance and user experience, and I made the difficult decision to stop these efforts and focus on our core hardware portfolio”.

The executive highlighted that BlackBerry has “never been a device-only company”, as it is also running a “global secure data network and services business”.

However, revenue from its services operation fell $153 million (16 per cent) over the prior sequential quarter, due to currency issues in Venezuela, a shift to lower-tiered service plans, and lower numbers of BlackBerry service subscribers (72 million, down 4 million).

It noted that there is a “high level of churn” among users due to both competition in the smartphone space and the transition to BlackBerry 10 – with the new BlackBerry platform not generating service revenue in the same way.

Moving forward, BlackBerry will not update on subscriber numbers, and will instead “look to provide additional information associated with these services and any other relevant details around service revenue trends”.

During the quarter, 71 per cent of revenue was for hardware, 26 per cent for service and 3 per cent for software and other revenue.

It also noted sequential revenue growth in North America (up 30 per cent) APAC (35 per cent), and EMEA (9 per cent), although Latin America saw a decline (down 6 per cent) on foreign currency restrictions in Venezuela.

Moving forward, the company said that it is anticipating a loss in Q2.

“Over the next three quarters, we will be increasing our investments to support the roll out of new products and services, and to demonstrate that BlackBerry has established itself as a leading and vibrant player in next generation mobile computing solutions for both consumer and enterprise customers,” Heins said in a statement.


Steve Costello

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