I previously described 2011 as BlackBerry’s annus horribilis. Turns out, I was wrong. It appears that this year could be the company’s most horrible year. The smartphone company has posted a US$4.4 billion loss in the third quarter, largely thanks to a massive writedown on its assets and inventory. Its results also reveal a massive problem it currently has at the moment – no one is buying a BlackBerry 10 device.
The company says that it managed to sell 1.9 million devices this quarter, down from 3.7 million last quarter. However, BlackBerry also notes that most of the devices it managed to sell were largely from BlackBerry OS 7 devices and not BlackBerry 10 – out of 4.3 million BlackBerry devices sold to end user, 3.2 million were from BlackBerry OS 7 devices.
That means that only 1.1 million BlackBerry 10 devices. Those numbers are really bad when you consider Nokia – who is also facing similar problems trying to readjust in an iPhone/Android dominated market – managed to sell more Windows Phone devices, with 8.8 million Lumias sold at the same quarter.
Despite posting a massive loss, its interim CEO John Chen said that the company has a “commitment to the device market for the long-term”. This will involve a five-year deal with Foxconn to jointly develop and make future BlackBerry smartphones. However, BlackBerry says that they will still design the phone and its software.
“Partnering with Foxconn allows BlackBerry to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management – while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete more effectively,” Chen said.
The first phone to be developed by this new Foxconn deal will be new smartphone targeting the developing mobile markets like Indonesia – which, like Nokia with its Asha series, have been a reliable source of revenue for the company. But, of course, it can’t simply rely on that for long since almost everyone is going for that same market.
We all know BlackBerry needs to turn itself around. The only problem is how?