With BlackBerry's board already agreeing to go private for $9 a share, and with T-Mobile kicking the manufacturer out of its retail stores, it is hard to believe that just a few years ago that BlackBerry was a thriving company. Any businessman worth his pinstripes sported one of the Canadian OEM's handsets and the company name became a verb. So how did BlackBerry get to its current state?
Most people will tell you that BlackBerry's fate was sealed on that date in late June 2007 when the OG iPhone was released. But was that really the problem? After all, the shares of BlackBerry parent RIM continued higher for nearly a year, peaking above $140 in June 2008. Even as recently as 2009, BlackBerry still had a decent share of the smartphone market. It wasn't until the success of the Motorola DROID combined with the excitement over the Nexus One to kickstart an amazing growth in the Android platform, that BlackBerry started its precipitous decline.
Check out the chart below, published on Thursday using data from Gartner. As the green (for Android) continues to take up more and more of the graph, you can see how BlackBerry's slice of the pie continues to shrink. So if BlackBerry fans need someone or something to blame for the problems afflicting BlackBerry, Android might be more to blame than Apple. And of course, a management in denial was also part of the problem.
BlackBerry to cut 4500 jobs in face of loss of up to $US995 million
BLACKBERRY said it would cut 4500 jobs as the struggling Canadian smartphone maker retrenches in the face of hefty losses and weak sales of its new handsets.
BlackBerry said it expects a loss of $US950 to $US995 million in second quarter mostly due to writedowns linked to poor sales of its Z10 smartphone, the device aimed at reviving its fortunes in a market dominated by Android and Apple.
The company's highly-publicised launch of the BlackBerry 10 platform earlier this year failed to ignite sales. The company has said it is examining "strategic alternatives," including a possible sale of the company.
The job cuts constitute 40 per cent of the company's workforce and will take staffing down to 7,000.
The loss in the upcoming quarter includes a $US930 to $US960 million charge resulting "from the increasingly competitive business environment impacting BlackBerry smartphone volumes" and a $US72 million restructuring charge, the company said.
Revenues are projected at $US1.6 billion, well below the $US3.06 billion expected by analysts.
BlackBerry will cut its portfolio from six devices to four and expects to reduce its operating expenses by approximately 50 per cent.
"We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and competitive industry, and to drive the company toward profitability," said chief executive Thorsten Heins.
BlackBerry shares, which were suspended ahead of the news, were off 15.6 per cent in late-afternoon trade.
