BlackBerry Bleeds Cash as Stubborn Board Looks for Success In B2B

FacebookTwitterLinkedIn

The prognosis for BlackBerry seems to be getting worse and worse. The company lost an astounding $4.4 billion in the third quarter, its seventh-straight quarterly loss. 

The company started the year with high hopes that its January launch of its Z10 handset would be a game changer. Alas, it was not and things have gone downhill from there. After toying with a buyout offer from Fairfax Financial, the company announced in November that CEO Thorsten Heins would step down and be replaced by John Chen, and instead accept an infusion of $1 billion from Fairfax and shareholders. 

The impression was that BlackBerry would step back from its consumer-facing business, and instead focus on software and B2B relationships. And, according to the New York Times, a new deal with Foxconn, the manufacturer of iPhone and others, will help the company do just that. 

It has worked with Foxconn for some time but its new five-year partnership “seems to be a way for BlackBerry to effectively hand over some of its handset business without running afoul of Canadian foreign investment laws,” the Times reports. The pair are planning to “jointly develop and manufacture some phones with Foxconn in the future, including a new model aimed at the Indonesian market” and other emerging markets.[more]

Instead of handsets, BlackBerry will put its energy towards BlackBerry Messenger, corporate mobile software, as well as mobile products for auto manufacturers. “While our enterprise services, messaging and QNX embedded businesses are already well-positioned … the most immediate challenge for the company is how to transition the devices operations to a more profitable business model,” Chen said, according to Reuters.

Over the year, BlackBerry’s stock has fallen around 47 percent, and analysts aren’t optimistic that Chen will turn the company around anytime soon. “While we have respect for his prior efforts at turning around Sybase, and see the logic behind his likely repositioning of Blackberry into an enterprise software and services company, the task ahead is daunting,” Colin W. Gillis, a technology analyst at BCG Financial, wrote in a note to clients, Time reports. “We expect that this turnaround effort has approximately six quarters to show progress before BlackBerry suffers a fate similar to Palm, which sold for $1.2 billion in 2010.”

With hopes of tackling one of the company’s major mobile issues—apps—BlackBerry has released its next operating system to developers so they can build and repackage apps for the new system, which is due out next year, according to Computer World. 

With BlackBerry devices only accounting for 2 percent of new smartphone shipments in the third quarter, it’s only time before the company has to issue another public plea for support. 

FacebookTwitterLinkedIn