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Blackberry Reports $934 Million Loss From Unsold Z10 devices.
Canadian Phone maker, BlackBerry, has reported a quarterly loss of nearly $1 billion on Friday. The announcement is in line with the company's warning last week right after it accepted a deal to sell for $4.7 billion to a consortium led by Fairfax Financial. Its net loss for the second quarter was $965 million, or $1.84 a share. The struggling phone maker's revenue fell to $1.6 billion when compared to last year. All in all, that's a 45 percent dip revenue.
And here's the ugly part, about $934 million of those losses came from unsold Z10 phones, a touchscreen model using the Blackberry 10 OS that was designed to be the company's savior. However, it turned out to be a disaster, costing the company heavily. Earlier this week, Blackberry slashed the price of the device worldwide. In India, online retailers are selling the Z10 for a new price of Rs. 30,000, a sharp cut from its original Rs. 40,000 plus.
"While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10, where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013", said Thorsten Heins, President and CEO of BlackBerry. "We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt. We are focused on our targeted markets, and are committed to completing our transition quickly in order to establish a more focused and efficient company."
Last week, the company announced its plan to trim 4,500 jobs worldwide to save on almost half of its expenses. It also said that it would exit the consumer sector and serve only the enterprise and corporate sector, which served as the cradle of its success in the past.
After it is absorbed by Fairfax Financial, its largest shareholder, the company will go on to become a privately listed company. Prem Watsa, CEO of Farifax, who played a key role in the pending acquisition of the Canadian phonemaker, is confident that Blackberry still has a future if run properly.