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back to article BlackBerry Black Friday: $1bn loss as warehouses bulge with hated Z10s

BlackBerry endured a catastrophic second quarter as today it announced a $965m loss in those three months. Its revenue from the period was half of the first-quarter takings and half of last year's second-quarter revenue. BlackBerry cancelled its conference with analysts that traditionally accompanies these quarterly results - …

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Fire Sale......

Wonder if they will flow off the phones cheap.

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Anonymous Coward

Re: Fire Sale......

Has started..... $80 a handset.......

But still no one wants them.

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Anonymous Coward

Re: Fire Sale......

Ted - Yes that will almost certainly happen. If you read the coded messages the Z10 and Q10 simply haven't sold. There are millions of these looking for a home. They have taken the Billion dollar hit. Might as well offload them. Just like the Playbook $565m hit before. I got a playbook for $100. Generally rubbish but good browser and very good for watching films. A $100 Z10 nice as a second device or to give to kids.

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Re: Fire Sale......

$80 on contract? What's price for payg/sim free UK/Ireland please?

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Anonymous Coward

Re: Fire Sale......

Can it run Android?

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Anonymous Coward

Re: Fire Sale......

At least it clears the shelves for the new Nokias being released soon......

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Re: Fire Sale......

Where is a Z10 on sale for $80? I might be interested, but I only saw $250 on kijiji. Only because Mozilla OS is not available yet.

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Contact the Cyanogenmod people for a quick Android port

Flog the lot at cut prices..

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So does that mean

I'll be able to pick up a Z10 in a fire-sale?

Just the thing to go with a playbook.

It's a shame

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they should have stuck to their knitting

Blackberry makes great email devices. What they should have built was an e-ink device with a good keyboard and great battery life. Focused on the corporate market, based on security and productivity, and left the music 'n teens to Apple. This is from 2010

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I know it's easier to predict than it is to solve

But I think everyone saw this coming. When your business has fallen off the radar and you have one shiny new gadget that will save you then for God's sake price it keenly. Noone in their right mind was going to pay the same for a Blackberry phone as they would for an iPhone/Galaxy.

Nokia and HTC will be delighted to have one less competitor for the 'plucky third place innovator' spot, but this whole episode is a real eye-opener about how deadly the technology market is for companies with poor leadership.

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Takeover offer

Actually all they've accepted as I understand it is that Fairfax have a preferred status to offer to buy out the company for $9 per share. BBY are free to talk to other parties and could accept an alternate offer subject to a (significant) penalty fee.

At present nothing is binding on either party and they are still trying to arrange the funding to allow the deal to be completed .

May well happen - but its a long way from certain.

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I have a Z10 and it's actually not a bad phone. Had BBs before from work over the years and like them. It's pretty fast, I have BBM and it's great, a secure OS, secure email, there's not a lot bad with it apart from the general media feeding frenzy b*****s because they all jump on the same bandwagon and can't think for themselves or don't want to stand out, and BB themselves not doing a great job getting it out there. But for me apps have little or zero interest. I have a few but couldn't give a monkeys really whether they had any or not. I like the Z10, and if BB go then there's less consumer choice - which is a bad thing, and I DON'T WANT an iPhone or an Andriod phone - had one and hated it. As for Microsoft, let's not even go there...

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Same here

Bought a Z10 after having several Android devices and two Nokia Lumias (one WP7.5, one WP8). Was feed up with Android's oddities and security issues. WP8 wasn't bad but the OS lacks several features that are important for me (like being able to download large files), and that aside, the time it takes MS to come out with updates is ridiculous. Didn't really expect to like it and it took a while to get used to the UI but the Z10 and BB10 has really blown me away. The Z10 is a great phone with a remarkably good display, decent camera, very good receiption (better than my Lumia 820), very good call quality, replaceable battery, HDMI out and support for 64GB mSD cards. BBOS 10.2 is fast and slick on hardware where Android still lags like hell, can run Android apps, comes with a very good browser (with Flash support), a full media server, can share storage via SMB over the network, and lots of other features. And BB10 has in a short while seen more work and much greater improvements than WP from 7.0 days to WP8 today.

It's really a shame it failed on the market. But neither the Z10 nor BB10 are the reason why BlackBerry is now in the situation it is in. The reason why the Z10 failed on the market is purely down to price and marketing. When it came out, the Z10 was (depending on the vendor) as expensive (or even more expensive) than an iPhone 5 or high end Android handsets like the Galaxy S3, which made sure that customer interest was killed in an instant. That BB's moronic management thought it might be a good idea to artificially delay their other BB10 handsets (Q10 and Q5) made the situation even worse.

There's still hope. Fairfax is not exactly known as the typical gut&sell shop so if they take over they may be able to turn the business around. Would be a shame if we get stuck with iOS, Android and WP only.

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Given your phone preference plus the fact that none of the others work for you then, and I don't mean any offence here, it looks like you are well and truly stuffed. Sorry.

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wow

Whole lot of butt hurt in that post. You didn't put a third of retirement account in BB stock a few years back did you?

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"the time it takes MS to come out with updates is ridiculous"

don't hold yer breath waiting for the next BB10 update...

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Anonymous Coward

Re: Same here

"WP8 wasn't bad but the OS lacks several features that are important for me (like being able to download large files"

You can download any file that you have space / bandwidth for. There is no hard limit.

"the time it takes MS to come out with updates is ridiculous"

They have released more major updates in the last ~ 2 years than any competing OS...

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Z10 Owner, And The Only One By The Looks Of It

Jesus, I was not expecting this. I bought a Z10 2 months ago, and it's a good phone. A very good phone. A girl in the office here has a Q10, and I prefer the Z10 to that due to the bigger screen. But I can't understand the hate people have with this Z10?

Those hoping for a fire sale on Z10's, just think of this. When/if Fairfax buy BlackBerry, it will be wrapped up and sold off in bits (obviously). Will there be the an obligation for them to continue to provide BlackBerry services which the phones need in order to contact the internet while on 3G/4G? While they may be run through the mobile company, they are provisioned by BlackBerry. And trust me, if you don't have BlackBerry services then you won't be getting internet on your Z10. I should know, I had to call EE when I couldn't access the internet and they told me BlackBerry Services had to be enabled on their end. If they switch off BlackBerry Services then you're left with a touchscreen Nokia 3310. Something that will make calls and receive texts, but nothing else.

I'm watching with interest on what happens with this and their BlackBerry Services. I feel this is the critical issue now as the hardware side has all but gone now.

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Anonymous Coward

Re: Z10 Owner, And The Only One By The Looks Of It

Not the only one, I've got one too ... but not too many others by the look of it. The problem is that most people I know already have an iPhone or Android powered other phone by the time the Z10 was released, so there is not much of a market for take-up in volume.

People will buy them, but only over time as existing contracts expire on older generation phones. There isn't a mass market out there any more full of people who don't yet have smart phones - the capacity in that market not yet filled by iOS been pretty much taken by Android by now.

The networks aren't doing much to promote them either, so a lot of people will go with either cheaper phones or ones which their mates already have - because those come with an instant recommendation if they're reasonable.

Blackberry/RIM/Whoever need to reach a critical mass before their platform will overcome these issues. Its questionable whether they'll get anywhere near critical mass before they run out of money.

I'm not sure that suddenly launching the Z30 - pissing off people like me who not long ago bought a Z10 - was very clever either.

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Anonymous Coward

If you don't have BlackBerry services then you won't be getting internet on your Z10

Sorry but that is nonsense. As a Z10 owner with a plain standard PAYG sim card from Three (the only ones without ridiculously low data limits) I can assure you that internet on the Z10 works perfectly fine without any BB services enabled. And it's somewhat of an open secret that one of the new features of BB10 was that it no longer requires BB services.

Looks like EE pulled a fast one on you. A second time, after luring you into one of their overpriced contracts I guess.

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Re: Z10 Owner, And The Only One By The Looks Of It

I liked the look of the Z10 just before it came out. I was looking for a new smartphone and was keen to try the BB way.

Then they wanted a small fortune for it SIM free.

Nexus 4 it was then. I'm sure I'm not the only one that did the same.

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Re: Z10 Owner, And The Only One By The Looks Of It

.........." if you don't have BlackBerry services then you won't be getting internet on your Z10. I should know, I had to call EE when I couldn't access the internet and they told me BlackBerry Services had to be enabled on their end."

I wondered about that when I activated a BB 9800 given to me by a friend. Took a good 4 hours for the internet to start working and this seemed to coincide with a message from BB that my phone was now "registered". WTF is that all about ? Tweeted Blackberry but they blamed EE.

As far as I am concerned, my relationship is with EE and BB just made the hardware. If I'm paying EE for internet, they'd better provide it even if it involves fixing the hardware so it's not longer tied into Blackberry.

This is like the bad old days of BT and Deutsche Telecom when you couldn't connect a modem to their lines unless they supplied it.

With a business philosophy stuck in the 1970s, Blackberry deserve to disappear.

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Pint

Re: Z10 Owner, And The Only One By The Looks Of It

Not even via wifi?

I know iPhones call home to momma, because with unreliable connections they will hang up with their Apple.com left dangling.

I guess I'd better keep my PlayBook up to date in case they pull the plug at BB's GCHQ.

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Re: Z10 Owner, And The Only One By The Looks Of It

On the question of whether Blackberry like my older 9800 can do internet without paying for Blackberry so-called Internet Service......

A little research suggests changing the phone's TCP/IP APN settings to include your provider's data server. In the case of T Mob you type general.t-mobile.uk in the blank space.

There are several You Tube guides to doing it.

So if BB folds or starts charging silly money to continue internet on legacy BB phones, the above might get round it.

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Anonymous Coward

Re: Z10 Owner, And The Only One By The Looks Of It

Hey Wolfetone, You've had other replies saying same, but yes at least the Z10 will work even if BlackBerry implodes tomorrow. That advice just sounds like a poorly trained worker at EE getting it wrong. Maybe confusing with the older BlackBerry generation devices. This isn't to make light of the fact you may have just bought 2013's version of the Ford Edsel!! But it will at least work as a phone, browser, e-mail for the duration of your contract.

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Anonymous Coward

Re: Z10 Owner, And The Only One By The Looks Of It

Jason - Yes. You would have thought this company's stupid management would have learned a hard lesson from the Playbook fiasco. Its as if their heads are still stuck in the golden days when BlackBerry was the only game in town if you wanted a smartphone.

Any company can make a dud device. But the Z10 wasn't. It was ok. That is why I fear for BlackBerry. A dud device can be fixed. Dud management - not so easy.

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Re: Z10 Owner, And The Only One By The Looks Of It

Well it'll be good if you can change the settings on it to get around the BlackBerry Services issue.

When my number ported over to EE I tried the internet on it and it didn't work. I tried a few times, nothing was happening. I called them and the lady I spoke to said that BlackBerry services werent' enabled. She activated it on her end, and my Z10 sprang in to life. While you could argue this is a load of bunkum, a girl in the office with the Q10 on EE had the same issue, and was told the same thing. So whether EE operate in this specific way I don't know.

As for the contract cost, I pay £24 a month for unlimited calls and texts, and 500MB Data. Yeah, I know, it's not a lot of data, but when I'm either at home where I have WiFi or at work where there's WiFi. The only place I don't have WiFi is when I'm driving, and we all know you can't be checking Facebook while driving.

Furthermore, you can access the Internet through WiFi without BlackBerry services I think.

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at least they are consistent

BBM on android, delivery date missed? Check. Compel user to rate @ 5 stars to download? Check. App not working? Check. They are architects of their own demise, just like Nokisoft.

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Trollface

Re: at least they are consistent

No worries they promised to fix the BBM mess ASAP. Of course I am sure by announcing they are laying off half the workforce the engineers are still very motivated and working overtime to fix things.

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Re: at least they are consistent

Of course I forgot to add, allow many fake bbm apps to lure the unwary to download, covering their phones in viruses. I'm increasingly becoming a revolutionary socialist as I watch egregious failure in Senior and Middle management being rewarded by billions of currency and the business solution always being 'sack the workers'!

Does anyone really question that many of the lowest paid (or unpaid in the case of interns) could have done a better job of running these companies? I understand that to have entrepreneurs we have to allow failure, but now we are rewarding it whether its banks or business. Sorry, rant over. Don't even get me started on the service voda 'offers'..............

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Anonymous Coward

Re: at least they are consistent

"They are architects of their own demise, just like Nokisoft."

You mean Nokia's device business? The new Lumia range has increased sales at over 30% a quarter for the last several quarters, and they were forecast back into profit next quarter. Windows Phone also just went over 10% in a number of key markets - such as the UK.

And that was before they decided to sell out to Microsoft, who will likely throw bundles at marketing, R&D, etc.

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Anonymous Coward

Re: at least they are consistent

"covering their phones in viruses"

Only if you use Android.....

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So just like Microsoft

But without the Office cash cow money to keep them going.

I don't think people hate the Z10, I think they expect it will not get much support and end up being a dead end. Buying an expensive phone, why take a risk go for Apple or Android.

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Maybe...

Maybe another way out would be to improve the existing phone.

Already manufactured handsets could perhaps use software to dovetail into users' workstations. The marketeers can call it 'the cloud'.

I would be interested if the device could connect to my PC and allow me to use my big screen and keyboard to manage data on the mobile device. Blackberry's original software was simply dreadful in this regard but it shows it's doable.

Another way to perhaps improve the phone is to find a way to make them upgrade-able to add more storage.

Right now their problem is to stop the hemorrhaging customer base. Rather than attempting to eke out a profit on stupid margins for a small number of phones sold to die-hards, they could perhaps up the value of their offerings by including things like power adapters, cases, etc at reasonable prices. Right now, the aftermarket is selling phone cases for something approaching or even exceeding the original capital layout for the device itself.

I would have *stayed* with Blackberry if they hadn't been such dicks. My Blackberry phone was a disaster and they offered no incentive to take a chance with them again, so I didn't. As a developer, I joined their network, but there was no incentive to develop for them, so I didn't.

Blackberry is still pushing around a lot of money and has a massive customer base. Perhaps if they were a bit more humble and asked their existing base to stick with them, a big chunk if that base just might stay -- if they though that Blackberry would start being a good partner.

One of the biggest opportunities here is that the other phone makers have not really set the bar very high in things Blackberry can do something about -- upgrades, add-ons, software, service and ... Their real ace in the hole could be to provide a *secure* platform for communications. This is mostly doable and they already have a better reputation for security than most.

Taking the company private? Probably a good idea for the ones who manage to scoop it up at the price being discussed. If it was me, I would be taking a hard look at their in-house developers. They went horribly wrong and it is not likely just happenstance. Their code should be much leaner and meaner and even though slipped deadlines are common in software development, these slipped deadlines and under-delivery likely put a stake through the company's heart all on its own. There is at least a profound communications gap between Management and Development, just like there is between Management and the Customer base. Probably a good idea to take an even harder look at the common denominator -- Management.

I do not want to be overly glib about the challenges here, but I think they have the resources to pull through this, but only if they really clean house.

Finally, though I don't think it met with much of a reception, as I mentioned last time and as is true for many companies, facebook is the first company they should approach. They could put Blackberry right back on the map at a stroke.

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Anonymous Coward

I have an employer-provided z10 and absolutely hate it. It's got the worst UI I've used in a long time. I can see why they have a warehouse full of them. I used to have a BB Bold (and a couple of earlier models) provided through my employer and while I never cared for them at least they were easy to use. My employer no longer offers the z10 as an option. I'm not surprised. I've only found two other coworkers that selected the z10 on their latest refresh and neither of them like the z10 either.

I finally ended up getting a cheap Android phone with my own money and I moved the SIM over to it. I don't really care for Android, but its UI is much better than BB10.

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Pint

$965M three months 12,000 staff

Now I know that they'll have other expenses than just staff payroll, like power and water bills. But the raw numbers are $26,000 per staff per month. Since that makes little sense, where exactly did the money go?

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Anonymous Coward

Sad

How the mighty have fallen.

Not in any small measure due to the sheer arrogance and blinkered attitude of the management. And of course, the pricing polices. Wannbe Apple's and more than Apple prices to match their stupidity.

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Shame.

Such a bloody shame :(

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This reminds me of the fall of Amiga inc.

Endless rumour, white knights and increasingly desperate predictions for a positive future whilst facing insurmountable odds resulting from incompetence.

No corporate strategy, insufficient money and operational paralysis. Shame really, I like my z10, nice phone, but *as an all round device* it's rough edged and not a patch on the iPhone 4 it replaced.

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Re: This reminds me of the fall of Amiga inc.

Mehdi fucking Ali :/

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Fire sales

In the last year, I got a Playbook 32 GB for $130, a Lenovo Windows 8 (Full, not RT) 12" tablet for $300 (good hardware, but got rid of it, W8 is terrible), a Nexus 4 8 GB for $199.

BB, sell me the Z10 for $199 and I will leave Android.

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Bronze badge

Current CEO is just as bad as the previous duo...

...which is not much of a surprise as TH, hand-picked by Lazaridis, already came in carrying the virus 'lazaritis' in his blood - and acted accordingly: reluctant to invest appropriate amount of money in anything thus ending up with VERY slow development, resulting in a launch of BB10 postponed for YEARS, then coupled with a device priced WAAAAY ABOVE market realities while sporting mid-tier specs and a still-unfinished OSand messy rollout, topped off with a truly incompetent rollout mess, pathetically dubbed as "staged rollout" instead of admitting anything.

TH main concern was balancing the books, all the time, cutting on investment especially on staffing - there's no other explanation why BB was rolling out 720p dual-core device with high-end price tag with an unproven OS to a crowded, matured market without a huge marketing blitz...

...I guess the CEO's $50M walkaway package in case of a sale was way more interesting than risking a lot of money on a "go in, go big" approach paired with much thinner per-device margins (which would've probably sold a LOT MORE phone, generating a lot more users, resulting in higher market share, which in turn might have spurned better app support among devs etc etc.)

As much as I always hated the old, outdated BBOS I really enjoyed the 2-week tryout period I had with BB10.0/Z10 combo back in June (returned due to bugs, crappy Android runtime and lack of features - all that apparently have been properly addressed in the new 10.2 since!)... I'd be very sad to see such a promising OS to end up like this, ruined by one incompetent, arrogant, clueless executive fool after another...

...here I am, an early Android adopter, still hoping BB 10 will make it, in one way or another, we need competition, not to mention its endless possibilities in the fast-growing embedded world, riding on QNX's enormous existing coattails.

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Anonymous Coward

Re: Current CEO is just as bad as the previous duo...

Agree. As the postmortems start to flow the start point does need to go back to the appointment of TH as CEO. I never understood that. Here was a once great company driven by two founder CEOs who had finally stumbled badly. That happens eventually in most founder led companies. But why oh why oh why would you then promote the very guy that had presided over the collapse as COO to CEO. That was the strangest thing. Remember his first interview before the PR people shut him up and re-wrote his script..... "Problems? - I see no problems...."

One for business schools everywhere to teach.

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Very sad to see. As a business user there are two main reasons we did not go with bb10.

Firstly having to have a completely separate BES infrastructure for 10, no backwards compatibility. What were they thinking here? Cannot understand this at all.

Secondly removing the international roaming fixed monthly cost meant there was no real cost saving in sticking with bb for our traveling users.

So we have terrible business strategy in both business and consumer markets leading to the mess they are in. While it's easy to be captain hindsight, surely everyone predicted this? It couldn't go any other way.

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Not surprised

To be honest I feel it is their own fault, they never listened to what their customers wanted, but though they were market leaders, but were blinkered by their own life style, did n ot notice what was going on around them till it was too late. Shame as I used to like the handset, but the software let them down.

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Anonymous Coward

$80 firesale = $800 unlocked at Rogers

The ripoff phone companies destroyed Blackberry as much as they did themselves in. Any smartphone attracts a ripooff plan like $65 a month at least, for what?

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