Canadian handset BlackBerry released its Q4 financials over the weekend, and the news is grim. The smartphone maker reported a net loss of $256 million for the three months that ended February 29, on revenues of $464 million, a decline of almost $200 million for the same period last year.
The numbers are particularly bad considering BlackBerry just launched its Priv handset, the first BlackBerry to run the popular Android operating system. The Priv first launched on AT&T in November, and then on T-Mobile in January and Verizon in March. Many observers were hoping that the Priv would help turn the ailing company’s fortunes around. Instead, the model appears to be yet another albatross around BlackBerry's neck.
Priv Is No Savior
“We haven’t seen any Privs among our clients,” Ken Dulaney, vice president of mobile computing for Gartner Inc., told us. One of the key problems with the device has been the company’s decision to go with a “slider” design, which has not been popular with customers who prefer larger displays over a sliding keyboard, he added.
Then there’s the question of the operating system. Dulaney said that the company’s decision to switch from its proprietary operating system was a good one, but that the move came too late to stem the tide of customers fleeing the platform.
Even worse, by switching to Android when they did, BlackBerry essentially sabotaged its own business by cannibalizing demand for the BlackBerry 10 OS, which still runs on the company’s other models, according to Delaney.
“No one is telling us they’re expanding to BlackBerry,” Dulaney said of enterprise clients. Instead, most are moving away from the platform in favor of Android or iPhone devices, leading to a rapid erosion of the once-ubiquitous device’s customer base. While the company still has some fans in the enterprise market, it has essentially been abandoned by the consumer market with little chance to recover its position.
Focusing on Software
Despite these issues, the company still has its advantages. BlackBerry’s security features are still its biggest selling point -- even President Barack Obama uses a secure BlackBerry. The problem with the Priv stems from the company’s decision to launch it without first making it ready for regulated businesses such as military and other customers of the U.S. Department of Defense, according to Delaney.
The company has discussed the possibility of selling off its hardware business to focus on software, where BlackBerry’s security features give it a distinct advantage over its competitors. If the company is going to reorganize itself as a high-security software maker, Delaney said he hopes the decision comes sooner rather than later.
Otherwise, the company may have trouble selling the minimum number of devices needed to stay viable. While CEO John Chen once said the company needed to sell 5 million units to break even, he has since lowered that estimate to 3 million. Right now though, even those more modest numbers may be out of reach.
The handset maker is hoping it can at least keep users interested in its messaging app by moving some of its most popular features out from behind a pay wall. Starting today, the privacy functions Retract and Timer will now be available to all users.
Previously, users had to have BlackBerry Messaging subscriptions to access those features. With Retract, users can retract messages and pictures they sent to recipients in error or no longer wish to make accessible. Timer, meanwhile, gives users control over how long their contacts can view shared messages, pictures, or location information.
“Building on the renowned immediacy, reliability and security inherent to BBM, the new release provides unmatched level of privacy and control to BBM users without any subscription fees,” Matthew Talbot, SVP, BBM at BlackBerry, said today in a blog post. “Keeping control over the messages and content that they share, BBM users can be ensured that what they share is always theirs to control.”
Image Credit: BlackBerry Priv smartphone image courtesy of BlackBerry.
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