Blackberry’s financial woes revealed with $965m loss over Q2 of 2013

by Andrew Roach on September 30, 2013

Blackberry has had an exceptionally tough 2013 so far and the tech world has been nervously anticipating to see how bad Blackberry’s shocking figures for the second quarter would be after comments from the company earlier in the week.

Finally, the damage has been revealed as Blackberry announced on Friday that the company had posted losses of $965 million during the second quarter of 2013.

The main reason for such a devastating loss is down to the writing off on many unsold smartphones produced by the company totalling for 96% of all the losses.

Alongside the near billion-dollar losses, the company’s overall revenue was half that of what they had managed back during the first part of the year.

It’s hard to fathom where Blackberry truly went wrong but it seems that more and more of their recent problems are stemming from some of their newer devices – particularly the Z10.

The Z10 was the first Blackberry 10 smartphone and was very much a gamble for the smartphone manufacturer as it featured a completely new operating system and abandoned the much-loved QWERTY keypad that many fans loved about the service.

With the smartphone failing to take off in America and losing out to rivals in both Canada and Europe, Blackberry has moved to write off $960m of its unsold inventory with the majority off that relating to the Z10.

It’s not the only Blackberry 10 smartphone that has struggle to sell well since the platform’s launch in January and its diminishing popularity has seen the company’s revenue fall by 50% over the past 3 months to $1.6bn.

The problems have been so bad that the company only sold 3.1 million smartphones globally over the last 3 months with the majority of those being older devices using the Blackberry 7 Legacy smartphones rather than their newer models.

Having performed so poorly, Blackberry officials have acknowledged the problems that the company has faced over the last three months with CEO Thorsten Heins telling the press: “We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure.”

The attention will now turn away from the shops to their headquarters at Waterloo as Blackberry continues to discuss their potential takeover by former director Prem Watsa.

Watsa has vowed to keep one of Canada’s most prominent names alive and kicking once their takeover has been finalised and many people will be hoping that a deal can be struck sooner rather than later.

Until then, Blackberry will need to stay in damage limitation mode to not only keep their presence in the booming smartphone market but to help themselves stay alive before it’s too late.

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Written by: Andrew Roach Follow by: RSS, Twitter, Facebook, or YouTube

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