Blackberry recovery story hits sticky end

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Blackberry released their much anticipated quarterly earnings report today, and the company defied all expectations by announcing a $0.13 loss, when analysts were expecting a $0.08 profit.

In response Blackberry’s shares are down nearly 25% in pre-market, with a bloodbath expected for the rest of the day as share holders desperately try and exit holding the company.

To make matters worse Blackberry was unable to provide any clear guidance for the future, except to say that they expected a loss in the next quarter also.

Blackberry subscribers dropped another 4 million to 72 million and despite great sales in their homeland, Canada, North American revenue was up only 30%, suggesting those Kantar numbers which showed only 0.9% US market share were right all along.

Blackberry announced 6.8 million in BB7 and BB10 sales, and revealed in their earnings call only 2.6 million of these were Blackberry 10 handsets, explaining why, despite the very high sales prices of the Blackberry 10 handsets, which sold for as much as $300 on contract, margins were down further to 34%.

Blackberry refused to release sell-through numbers, but based on Inventory increasing $250 million they are likely not very good.

Microsoft recently made the point that they are firmly in the third spot, and based on Blackberry’s performance so far there is very little to argue with that opinion.  With Windows Phone slowly creeping up on iOS in market share in many markets, we can certainly see which OS is trending up and which is trending down. Hopefully developers distracted by Blackberry will now turn their attention to a more competitive ecosystem like Windows Phone.

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