Unfruitful time for BlackBerry
0 Comment(s)
Print
E-mail China Daily via agencies, July 1, 2013
BlackBerry's shares tumbled the most since 2000 after the company reported a surprise loss and weak sales of a new touch-screen model, underscoring its challenges in competing directly with the iPhone and Android devices.
The company shipped 6.8 million smartphones last quarter, including about 2.7 million new BlackBerry 10 models - primarily its flagship Z10 touch-screen phone. Analysts had estimated total shipments of 7.5 million, with about 3.6 million BlackBerry 10 units. The company, based in Waterloo, Ontario, also blamed Venezuela's currency controls for a portion of its quarterly loss because they hurt Latin American revenue.
BlackBerry is struggling to expand beyond keyboard phones, which are still popular among some lawyers and other professionals but not as sought-after as Apple Inc's iPhone or smartphones based on Google Inc's Android. Last week's stock tumble more than wiped out its gains for the year, signaling investors may have been too optimistic about BlackBerry's ability to wage a comeback fight against touch-screen rivals.
"The company now is a niche player for the declining segment that clings to a physical keyboard," said Erik Gordon, a University of Michigan business professor.
BlackBerry shares plunged 28 percent to $10.46. It was the biggest decline since April 12, 2000, when stocks crashed after the dotcom bubble burst. The fall more than erased a gain this year of 22 percent before June 28.
BlackBerry's loss last quarter was 13 cents a share, excluding some items, BlackBerry said in a statement. Analysts had estimated a profit of 8 cents on average, according to data compiled by Bloomberg. It reported sales of $3.07 billion for the period, which ended on June 1, falling short of the $3.37 billion predicted by analysts.
"They missed on units, gross margin, earnings," said Kevin Stadtler, president of Stadtler Capital Management, which owns about 45,000 BlackBerry shares.
BlackBerry also faces price pressure in regions such as Latin America and South Asia, where low-cost Asian manufacturers are flooding the market with devices that run on Android.
"BlackBerry 10 is still in the early stages of its transition," Chief Executive Officer Thorsten Heins told analysts during a conference call. "In fact, we are only five months into what is the launch of an entirely new mobile computing platform."
BlackBerry's installed base of subscribers fell to 72 million worldwide from 76 million last quarter. That followed a drop from 79 million in the previous period.
Because of currency controls in Venezuela, no cash was received in the quarter from that country's services revenue, the company said.
