Thorsten Heins, head of BlackBerry, had high hopes for his phone’s new OS but it has failed to deliver.
Updated | When BlackBerry announced its new operating system and handsets back in January, analysts described it as “do or die” for the company. Six months later, BlackBerry is still here but the company has emphatically failed to deliver “do”.
Droves of investors gave up on BlackBerry in dramatic fashion on Friday, wiping 28 per cent off the share price after the company posted a shock loss.
Gartner analyst Ken Dulaney says the prospects for BlackBerry are not encouraging.
“Market conditions will make it extremely difficult for BlackBerry to rise above iOS, Android and Windows Phone 8 platforms,” Dulaney says. “Success in the consumer market is necessary to ensure long-term viability in business markets.”
BlackBerry shares closed on US markets on Friday (US time) at $US10.46 ($11.45) a share, down $US4.02 or 27.76 per cent in one day.
The exodus came after BlackBerry posted worse-than-expected financial results for the first quarter of its 2014 fiscal year.
Revenue for the three months ended June 1 was $US3.07 million, up from $US2.8 million for the same period in 2012.
The company posted a net loss of $US84 million and an operating loss of $US169 million. For the same quarter in 2012 it posted a net loss of $US518 million and an operating loss of $U635 million.
The Guardian reports that Wall Street analysts had expected a modest operating profit of $US25 million. BlackBerry also missed its sales targets for its new-generation Z10 and Q10 handsets.
As BRW has previously reported, BlackBerry’s strategy was to compete for third place, by operating system, in the smartphone market behind Google’s Android and Apple’s iOS. Gartner figures show that BlackBerry is still clinging to third place, but Microsoft’s Windows 8 is catching up fast.
Gartner figures for the first quarter of 2013, show the BlackBerry operating system accounted for 3 per cent of all phone shipments worldwide, and Windows 8 close behind at 2.9 per cent.
This is a huge loss of market share for BlackBerry. In the first quarter of 2012, Gartner figures show the BlackBerry operating system was on 6.8 per cent of phone shipments, while a Windows operating system was on just 1.9 per cent of devices.
The loss of market share came despite the much-promoted launch of the BlackBerry 10 operating system and new devices with a touchscreen in January 2013.
Windows 8 was launched in October 2012, and is used on phones such as Nokia’s Lumia handset.
The Z10 phone launched in Australia in March. Gartner does not have Australian figures on BlackBerry shipments this year.
Rival analyst firm IDC says BlackBerry accounted for slightly less than 2 per cent of the 2 million smartphones shipped in Australia in the first quarter. However, this only overlapped with the release of the Z10 by only a few weeks.
IDC associate market analyst Bradley Murray says BlackBerry is refocusing on software, which would include the operating system and the mobile device management server software.
“We see BlackBerry making a major shift of focus from selling hardware to its software business,” Murray says. “Blackberry is playing towards its strengths, going to market with a secure enterprise platform which enables a secure interface on any device and supporting BYOD. This is a strategic move for Blackberry and is certain to change the way we view Blackberry in the future.”
BlackBerry Australia had not responded to requests for comment at the time of publication.