Broken Telephone: Blackberry Stock Plummets
Canadian company losing the smartphone game as stock falls more than 28%.
By: Tiffany Narducci, Staff Writer
Blackberry announced an unexpected loss yesterday, with its stock falling more than 28 per cent in this year’s first quarter. Some analysts are losing faith in the company’s revival.
The fruits of Blackberry’s attempted product overhaul are proving to be more sour than sweet. Hopes were high earlier this year, when the once dominant Canadian smartphone maker finally launched two long-awaited models, the Q10 and Z10, in January.
This financial tumble is yet another blow to the struggling company, formerly known as Research In Motion, which has spent the last year revamping its image.
Blackberry burst into the market in 2003 as the phone of choice for businesses and politicians worldwide, offering the only mobile device with quick and secure email, as well as text messaging, Internet faxing, web browsing and other wireless information services.
However, when faced with the release of the iPhone in 2007 and a growing host of international competitors like Samsung, Blackberry failed to expand beyond the business world and into consumer markets. Its low-grade Internet browsing as well as its failure to include popular apps made the company lose ground to its competitors.
In 2012, CEO Jim Basillie and company founder Mike Lazardis stepped down as co-chief executive and co-chairman. Thorsten Heins replaced them.
Heins has since announced the company’s intention to overhaul its products in the face of stiffening smartphone competition. Along with Heins came a small but steady turnaround in the company’s profits, as investors and consumers alike showed renewed interest in Blackberry’s makeover, and shares began to rise.
[pullquote]The company’s overall low sales and market slump have left many wondering whether Blackberry has found itself cornered, and whether the company’s attempt to reboot is too little much too late.[/pullquote]
Heins countered today’s announcement by explaining that the company actually expects future loses since it’s presently still within its “launch cycle.”
“We want total penetration of the market … To do that, you need to invest in marketing, you need to invest in promotions,” Heins said in an interview with CNN. “And we’re not done yet. There’s more exciting devices coming, and we will spend to market those as well.”
Blackberry plans to release a new software management program dubbed the “Secure Network Space,” which will allow users to move between personal and corporate modes. The company’s also continuing the release of the Q10 phone (which has only been launched in select markets) and will soon be launching the Q5, a low-cost phone expected to go to market in July.
Despite these prospects, yesterday’s numbers didn’t sit well with analysts who had taken a keen interest in the company’s seemingly promising revival. The company’s overall low sales and market slump have left many wondering whether Blackberry has found itself cornered, and whether the company’s attempt to reboot is too little much too late.
Tiffany Narducci is a master’s candidate in political science at Carleton University in Ottawa, where she also completed her undergraduate degree in journalism. She is passionate about international politics and how they affect humanitarian relief efforts, and hopes to begin a career in international development.