The contrast could not be more stark: This weekend while Apple was selling a record nine million iPhones and while 200 million iOS users were downloading iOS 7, the company that once dominated the smartphone business announced 4,500 layoffs, postponed the promised launch of its BlackBerry Messenger app for iOS and Android, and said it lost almost $1 billion during the most recent quarter.
Update: BlackBerry to go private in $4.7 billion deal.
BlackBerry (BBRY) confirmed late Friday that 4,500 people will lose their jobs, leaving about 7,000 employees at the struggling company. The move comes just a few days after the launch of BlackBerry’s latest touchscreen smartphone, the 5-inch Z30. Sales of its predecessor, the Z10, have been disappointing, and the keyboard-equipped Q10 has also failed to take off. BlackBerry says it will report an operating loss of $950 million to $995 million for its second quarter.
“We estimate that BBRY’s cash will fall to $1.7 billion by May 2014, when it expects to be complete on its 4,500 person reduction in force,” said analyst Kevin Smithen of Macquarie Securities.
“We believe BBRY’s board, management, major shareholders and the Canadian government will need to accept a low offer quickly before liquidity becomes an issue and valuable enterprise services customers depart en masse,” said Smithen. Enterprises continue to value the security offered by BlackBerry’s proprietary network, but they cannot change the fact that thousands of workers are bringing iPhones and Android smartphones into the workplace, and want to use them on the job.
BBM delay
Keenly aware of its competition, BlackBerry has tried to adapt its popular software for iOS and Android. Mobile subscribers around the world rejoiced at last spring’s news that the popular BlackBerry Messenger app was coming to iPhones and Android devices. After months of preparation, BlackBerry said it would release the app for both platforms this weekend. But during the weekend the launch was delayed. The company posted an “unreleased” version of the Android app, but then said it experienced “issues” as 1.1 million users downloaded the app. BlackBerry then decided to pull both the Android and iOS apps until further notice.
BBM for iOS was available in the iTunes store for several hours this weekend, and BlackBerry says the people who downloaded it can continue to use it. But the “unreleased” Android app will be disabled, so the people who downloaded it will not be able to keep using it.
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Image courtesy: New York Daily News
