At the annual and special meeting of shareholders on Tuesday chief executive officer of BlackBerry said that the company will continue its attempt to popularize BlackBerry 10 operating system and smartphones on their base in a bid to become the No. 3 smartphone eco-system. Even though Thorsten Heins remains open to other strategic decisions, he claims that before making them it is crucial to increase value of both the company and its assets.
“This is a long-term transition for the company, but I can assure you that we are pushing very hard. BlackBerry will pursue every opportunity to create value for shareholders. […] Before you go into any strategic option, I think you have to create value. And the value of the company 15 months ago was way less than what it is today,” said Mr. Heins to shareholders, reports Reuters news-agency.
The head of BlackBerry seems to be right: it does not make sense to sell a company that is greatly undervalued and unless BB10 becomes a popular smartphone platform the market capitalization of the software developer will continue to be well below historical levels.
Many market observers also propose BlackBerry to can its hardware business and then either license its operating systems to other smartphone vendors or focus on enterprise-class mobile communication technologies. Even this approach will not necessarily work since until BB10 becomes more or less popular among end-users no smartphone vendor will be interested in licensing it.
"We as a board remain completely supportive of management," said the company's chair, Barbara Stymiest, adding that she was confident the turnaround plan would succeed.
Shipments of BlackBerry smartphones during the quarter ended on June 1, 2013, totaled 6.8 million, up 13% sequentially from the previous quarter. The firm also shipped 100 thousand BlackBerry PlayBook tablets. Revenue for the first quarter of fiscal 2014 was $3.1 billion, up 15% from $2.7 billion in the previous quarter and up 9% from $2.8 billion in the same quarter of fiscal 2013. The revenue breakdown for the quarter was approximately 71% for hardware, 26% for service and 3% for software and other revenue.
Both Apple and Samsung Electronics sell tens of millions of smartphones per quarter and remain profitable. Despite of hefty price of BlackBerry 10-based smartphones, the company not only failed to sell a lot of smartphones, but also did not manage to become profitable. Moreover, the new Q10 and Z10 smartphones were sold in 2.7 million quantity, which means that they represented well below 50% of BlackBerry sales, a clear indicator that the new operating system cannot attract attention to the vendor.