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It's over: Blackberry is leaving the consumer market
Today, Blackberry released their preliminary financial results for the second quarter of the fiscal year 2014, and it’s worse than imagined. While nobody believed BB10 would fully resurrect the once mighty smartphone company, nobody expected operating losses approaching $1 billion, either.
According to the press release, BlackBerry will be “refocusing” on enterprise and end-to-end solutions. They’ll also trim their lineup from six devices to four, with two high-end offerings and two lower-specced phones. This effectively means that BlackBerry is giving up competing in the consumer market and will try to survive as a niche player in enterprise.
Blackberry will also cut 4,500 jobs, and attempt to reduce their operating expenditures by 50% before the end of Q1 FY 2015.
In addition to the operating loss of $950-995 million, the Waterloo, Canada company will also see a pre-tax inventory charge of $930-960 million, primarily attributable to Z10 devices. Blackberry did make $1.6 billion, of which half is service revenue, and expects to see revenue on 3.7 million smartphones, primarily BB7 devices.
The company expects their adjusted net loss to hover in the $250 million range, or about $0.50 per share. At the time of writing, Blackberry stock is currently trading at $8.73, and has fallen $1.80 on the day, which is more in tune with their GAAP loss of $950 or so.
This marks an end to Blackberry’s consumer presence, and a sad exit for a once prominent and ubiquitous company. While the enterprise market got them to where they were, programs like BYOD and Apple’s increasingly strong presence in enterprise will prove difficult. Google is also pushing hard, and has many top-tier companies “going Google”. Blackberry may find sourcing contracts for enterprise or government difficult in the current landscape.
It seems even the most obvious solutions for survival may no longer be viable for Blackberry.