For years, BlackBerry has rallied much of the company’s success on penetrating emerging markets with cost-effective handsets on both the hardware and data side.
Last week, during Jam Asia 2013, BlackBerry announced its Q2 results. The company was scheduled to have an earnings call and Q&A, but promptly canceled the event.
The company has since filed the remainder of the required SEC filings showing what is troubling BlackBerry. BlackBerry had surfed the wave of emerging markets, despite the platforms lacking the ‘popular’ apps.
However, smartphone OEMs began introducing cost-effective Android devices, rapidly undermining BlackBerry sales. We previously reported that retailers in the Middle East had noticed a sharp decline in BlackBerry sales.
“The Company has continued to encounter challenges with the BYOD trend. The Company also believes that uncertainty surrounding its ongoing strategic review process may have negatively impacted demand for the Company’s products in the second quarter of fiscal 2014. Going forward, the Company plans to refocus its product and services offerings on its end-to-end solution of hardware, software and services for enterprises and prosumers.
The smartphone market is maturing, resulting in lower growth rates, particularly in the higher-end segment of the market. The Company has experienced a decline in demand for its products and in its overall market share. The intense competition impacting the Company’s financial and operational results that previously affected demand in the United States market is now being experienced globally, including in international markets where the Company has historically experienced rapid growth. The increase in competition encountered by the Company in international markets is due to the recent entry into those markets of global competitors offering high end devices that compete with the Company’s BlackBerry 10 devices, as well as other competitors targeting those markets with lower end Android-based devices that compete with the Company’s lower cost devices. The decline can also be attributed to consumer preferences for devices with access to the broadest number of applications, such as those available in the iOS and Android environments. See “Results of Continuing Operations – Three months ended August 31, 2013 compared to three months ended September 1, 2012 – Revenue – Revenue by Geography”. The Company has also experienced a continued decline in service revenues”
Overall, it doesn’t look like things will be picking up anytime soon. The products are certainly great, but the perception is not. BlackBerry’s future is certainly in question. However, despite the dark cloud hanging over the company, it’s employees seemed keen to continue championing BlackBerry 10 to developers at Jam Asia.
You can read the full SEC filing here.