Sales of BlackBerry 10 Smartphones Miss Expectations

Shipments of BlackBerry 10 Smartphones Below 7 Million a Quarter

by Anton Shilov
07/01/2013 | 09:42 PM

 

 

Despite of redesigned operating system and brand-new lineup of smartphones, BlackBerry has failed to sell any significant amount of handsets during the quarter ended on June 1, 2013. Sales of new BlackBerry smartphones disappointed financial analysts, but the company itself seems to remain optimistic not only about its results, but also about its future.

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.

The smartphone market remains highly competitive, making it difficult to estimate units, revenue and levels of profitability, according to the company. Throughout the remainder of fiscal 2014, BlackBerry plans to invest in BlackBerry 10 smartphone launches, and the roll out of BlackBerry Enterprise Service 10, to continue to establish the new BlackBerry 10 platform in the marketplace.

The company will also invest resources to evolve BlackBerry Messenger into a leading cross platform mobile social messaging application, and launch other revenue initiatives associated with new services and emerging mobile computing opportunities. Based on the competitive market dynamics and these investments, the company anticipates it will generate an operating loss in the second quarter. The company will also continue to implement the cost savings and process-improving initiatives it started last year, in order to drive greater efficiency throughout the company, and redirect capital from these savings to areas of investment that will drive future revenue growth.