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BlackBerry loses $4.4 billion in Q3, sells just 4.3 million devices

post #1 of 104
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Canadian smartphone maker BlackBerry on Friday reported third-quarter losses of more than $4 billion as weak hardware demand continues to bedevil the company's turnaround bid.

BlackBerry


The news was grim for BlackBerry in the company's first financial report since an executive reshuffling that saw then-CEO Thorsten Heins forced out and replaced by former Sybase chief John S. Chen, with revenues down 24 percent from the previous quarter and 56 percent from the same time one year ago. The $4.4 billion loss was helped along by $4.6 billion in one-time charges related to the restructuring and inventory commitments.

BlackBerry now has just $3.2 billion in the bank --?less than half as much as rival Apple puts away in a single quarter.

Alongside the drop in revenue came a precipitous decline in device sales, with the company moving over 1.5 million fewer smartphones than they did in the previous quarter. BlackBerry 10-series devices continue to face tepid demand, representing less than one-fourth of the Waterloo, Ontario-based company's sales.

The lone bright spot in BlackBerry's third quarter results was the revelation that more than 40 million users have signed up for BlackBerry Messenger since its launch, as BlackBerry has convinced more than a dozen manufacturers to preinstall the app on their Android devices. BlackBerry Messenger's cross-platform rollout was originally conceived by company cofounder Jim Balsillie, but the strategy was later spiked by Heins and only resurrected after the abject failure of BlackBerry 10, which eventually cost Heins his job.

As part of a new emerging market strategy, BlackBerry also announced that it has inked an agreement with Taiwanese contract manufacturer Foxconn to "jointly develop and manufacture certain new BlackBerry devices and manage the inventory associated with those devices." The company says the partnership's first product will be a smartphone for the Indonesian market, where BlackBerry still enjoys a strong presence.
post #2 of 104

Doomed

post #3 of 104
I actually like BB10, but it was just a case of too little too late.
iPad, Macbook Pro, iPhone, heck I even have iLife! :-)
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iPad, Macbook Pro, iPhone, heck I even have iLife! :-)
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post #4 of 104
And their stock is up 7% in trading today.
post #5 of 104

Positively beleaguered!

post #6 of 104
Amateur hour is over.
post #7 of 104

I think they should sell the company off and give the money off to their shareholders...

post #8 of 104

I'm a proudly canadian, and the whole BlackBerry saga sadden me a lot.  

 

RIM had a niche product and instead of keep focussing on their core market, they try to become an Apple themselves with entertainment oriented product like the Playbook. When they reverted back to business market with the BB10 OS, it was too late for them. 


Edited by BigMac2 - 12/20/13 at 8:17am
post #9 of 104
So, for each device they sold they lost over $1000. Anyone who bought one should feel ashamed to be kicking this tech pioneer when they're down!

(iSupply will probably find the internals are made out of solid saffron or something.)
post #10 of 104

Unfortunately, I believe they are now in a downward spiral from which they are unlikely to escape. Companies are moving away from buying their devices because they are losing sales and market share, quickening the death spiral. 

post #11 of 104
We biz pro's will never miss BB. Good bye.
post #12 of 104
The numbers here seem to be off. I read in one place that they sold 4.4 million devices, but that must be wrong. Last quarter they sold about 3.6 million devices, and this quarter, sales are well down from that. Elsewhere, I read that they sold 1.6 million devices. Their sales dropped from $1.6 billion two quarters ago to $1.2 billion last quarter.

In addition, their cash position is confusing. I haven't yet read their financials, and won't have time to do so during the day today, but cash and equivalents rising from $2.6 billion to $3.2 billion is counterintuitive to a company in the situation Blackberry finds itself.

So for the moment, I'm assuming that this is because they are now counting the $1 billion in bonds they issued that Fairfax bought up in the total. That would make more sense, as the carryover from the quarter before would then actually be $2.2 billion. That makes more sense. Their cash situation therefor is actually continuing to deteriorate.
post #13 of 104
Quote:
Originally Posted by Rogifan View Post

And their stock is up 7% in trading today.

well, it was 4.2Million more units than my estimate;-)

post #14 of 104
Quote:
Originally Posted by TheUnfetteredMind View Post
 

Unfortunately, I believe they are now in a downward spiral from which they are unlikely to escape. Companies are moving away from buying their devices because they are losing sales and market share, quickening the death spiral. 

The US government still has a very high opinion of BB.... doesn't let the President have his iPhone.

post #15 of 104
Quote:
Originally Posted by Rabbit_Coach View Post

The US government still has a very high opinion of BB.... doesn't let the President have his iPhone.

I don't think it's a high opinion, I think it's the fact the BB the president uses can have its HW and SW controlled much more easily than with modern smartphones. I doubt Obama is using the Z10.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #16 of 104
I wonder if they will be able to pull off an "Apple" when at the time Apple was a few weeks from bankruptcy.
Yeah, well, you know, that's just, like, my opinion, man.
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Yeah, well, you know, that's just, like, my opinion, man.
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post #17 of 104
BlackBerry loses billions, stock takes huge leap upward.
Apple profits in billions, stock takes a continual slide downward. Fire Tim Cook.

/s
post #18 of 104
Quote:
Originally Posted by TheUnfetteredMind View Post
 

Unfortunately, I believe they are now in a downward spiral ....

'Now'?

post #19 of 104
Quote:
Originally Posted by TheUnfetteredMind View Post

Unfortunately, I believe they are now in a downward spiral from which they are unlikely to escape. Companies are moving away from buying their devices because they are losing sales and market share, quickening the death spiral. 

You have some funny logic. Sales are down because companies aren't buying their devices not vice versa.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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post #20 of 104
I'm sorry to see BB end. Not because I'm a fan, but because somebody needs to make Microsoft-Nokia look good. Without BB at the bottom, Microsoft-Nokia would be at the rock bottom of the list.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #21 of 104
Quote:
Originally Posted by nagromme View Post

So, for each device they sold they lost over $1000. Anyone who bought one should feel ashamed to be kicking this tech pioneer when they're down!

(iSupply will probably find the internals are made out of solid saffron or something.)

That was my first thought. That's quite a subsidy eh?
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #22 of 104
Quote:
Originally Posted by TheOtherGeoff View Post

well, it was 4.2Million more units than my estimate;-)

If they had made nothing, sold nothing and all stood very still they'd be better off!
Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #23 of 104
Quote:
Originally Posted by Rabbit_Coach View Post
 

The US government still has a very high opinion of BB.... doesn't let the President have his iPhone.

No, the U.S. Government is factually dumping Blackberry, I know this personally. In addition to all of that, the FBI, NASA, ALL of the Armed Forces, and many other branches have all shortlisted the company for decommissioning essentially. If not immediate, then planned retirement of all BB units at a Federal happen is almost 100% likely. The President still using the old BB is most likely due to feet dragging, and vetting new entrants, which can take many, many, many years.

post #24 of 104
Quote:
Originally Posted by Rogifan View Post

And their stock is up 7% in trading today.

As usual. First the risk. Second gamer enter the field. Third dead of the company. The flatline will start to jump and fall before dead happens.

So what! Nobody needs this crap tech of yesterday golden days
post #25 of 104
Quote:
Originally Posted by Rabbit_Coach View Post

The US government still has a very high opinion of BB.... doesn't let the President have his iPhone.

Gov will face the future as last man standing
post #26 of 104

Hmmm, $1k/device loss...

Hey RIMM! Pay me $1000 and I'll take one too!
(Better yet, just send me the $1000... you can keep the BB.)

post #27 of 104
Quote:
Originally Posted by Rogifan View Post

And their stock is up 7% in trading today.

That's because the China Mobile deal didn't fall through for them. /s

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #28 of 104
I don't get it, 4.3 million devices sounds like a lot to me... Why are they losing so much money?
post #29 of 104

Something has to be done about Apple, and quickly. The carnage this company has caused in the markets they have disrupted is simply unacceptable. First it was the mp3 player market riddled with the dead bodies of formerly big players like Creative and finally the Microsoft Zune. Next came the smartphone market which is now filled with the stench of wasted away companies like Blackberry, Moto, HTC, Nokia. Then came the iPad and the carnage it has heaped upon the PC business. Are we going to stand by and watch this, this Apple thingy do the same to the television and wearable tech markets? It’s time to take a stand! No more disruptions! Let the status quo prevail! ¡¡¡¡¡¡¡¡

post #30 of 104
As the 'smart-phone' before smart phones existed, it did email, light graphics attachments, some document editing back when the iPhone was just a sparkle in Steve Jobs pants. Let us give this company credit where it was due, for creating a different product with a secure backend that made believers out of the enterprises that backed them up. Do any of you remember what phones your company handed out before the BB existed? I do and my back /right hip are still hurting from carrying these around with three battery packs and sore feet from trying to obtain a clearer signal from my massive flexible antenna. Whether they survive the new 'smart phone' barrage or not, only time will tell but they deserve the honour of being the first successful one out there. Thanks BlackBerry for an amazing history.
post #31 of 104
Without the write down they would have been up $200 million. No doubt they are in trouble but brave companies will take a big writedown so they can move on. At least they aren't in denial anymore.
post #32 of 104
Quote:
Originally Posted by alienzed View Post

I don't get it, 4.3 million devices sounds like a lot to me... Why are they losing so much money?


Respectfully, your perspective needs an adjustment.  That's 4.3 million devices in a quarter (phones of all types).  Apple is manufacturing/selling the iPhone 5s's (just the one model) at a rate of a half million PER DAY. 

http://appleinsider.com/articles/13/11/27/foxconn-building-500k-iphone-5s-units-for-apple-per-day-with-nonstop-production-lines

 

As to why BB is losing money, I can only suggest that their customers won't pay enough to cover costs and provide a profit (i.e., the product is not compelling enough that people will pay a premium for it). And BB doesn't have an effective, money-making app store.  Perhaps BB users buy a phone, and are satisfied doing their email and gabbing.  Whereas iPhone customers actually BUY apps and USE their phones for many more daily activities, ranging from internet-browsing to gaming to reading to productivity, to health monitor/workout coach and much more!


Edited by TeaEarleGreyHot - 12/20/13 at 10:13am
post #33 of 104

Ok but you are comparing them to the market leader... NO ONE sells as many of one model as Apple. How are they doing against Nokia, Samsung, HTC, Huwuai (or however it's spelled). 

post #34 of 104
Wait, they lost $4B in the last quarter, but only have $3.2B left in the bank for this coming quarter. Am I missing something? Looks like GAME OVER.
post #35 of 104
Quote:
Originally Posted by alienzed View Post

Ok but you are comparing them to the market leader... NO ONE sells as many of one model as Apple. How are they doing against Nokia, Samsung, HTC, Huwuai (or however it's spelled). 

Samsung is profiting and most of the others are lucky to break even but none seem to be bleeding as badly as Blackberry.

But to answer your original question it's not a matter of how many units you can push (even though economics of scale do play a part) it's about what your costs are compared to your revenue. Their new devices running BB10 only accounted for 25% of their device sales which means 75% are all old models that simply aren't profitable like they used to be.

Who knows if any of their BB devices are sold at a profit. For all we know they are selling them at a loss specifically to look healthier to investors in that regard and hopping to bouy their profits with their backend services. Regardless, their costs are far exceeding their revenue, which isn't helped by all these executive changeover which usually come with huge golden parachutes.

Can they figure out how to carve out a niche before it's too late? It's possible, but I think it's unlikely.
Edited by SolipsismX - 12/20/13 at 10:29am

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

Reply
post #36 of 104

Thanks for the informative reply. I hope they can cut their losses and focus on what they do well. I don't think anyone has ever claimed that they products were "bad" per se. The playbook certainly had it's limitations and in the grand scheme of things was certainly ill-conceived, but I know people who still swear by their services...

post #37 of 104
I agree with theunfetteredmind. It appears that RIM is in a death spiral that will continue to feed itself as more and more people become hesitant to buy smartphones from a company they fear may collapse within a year. Adios!
post #38 of 104
Quote:
Originally Posted by cfugle View Post

As the 'smart-phone' before smart phones existed, it did email, light graphics attachments, some document editing back when the iPhone was just a sparkle in Steve Jobs pants. Let us give this company credit where it was due, for creating a different product with a secure backend that made believers out of the enterprises that backed them up. Do any of you remember what phones your company handed out before the BB existed? I do and my back /right hip are still hurting from carrying these around with three battery packs and sore feet from trying to obtain a clearer signal from my massive flexible antenna. Whether they survive the new 'smart phone' barrage or not, only time will tell but they deserve the honour of being the first successful one out there. Thanks BlackBerry for an amazing history.

I was gonna let this one slide, but you had to bring up Steve Jobs' pants. Dems fightin werds! /s

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
Reply
post #39 of 104
Quote:
Originally Posted by willychu View Post

Wait, they lost $4B in the last quarter, but only have $3.2B left in the bank for this coming quarter. Am I missing something? Looks like GAME OVER.

Cash flow and profits/losses are not the same thing.  As someone else pointed out a few messages before yours if you don't count the write-downs they would have made $200 million last quarter.  Obviously big losses are bad news, but you can't just project those losses forward and  compare to money in the bank.  Most (all?) of there reported losses are paper losses accounting for capital expenditure that were made in the past.

post #40 of 104
The time for bbry has runout. They are operating solely on debt now. They will have to sell assets to keep whatever they keep in existence. What they have left is a certain loyal segment and some ip.
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