Its no secret that BlackBerry isn’t having the best of days. The company has been caught in a web of bad press recently, primarily due to its own troubles. After announcing its fiscal second quarter results, in which it took a nearly $1 billion hit as an operating loss, BlackBerry has revealed more bad news in its recent SEC filing. Throughout fiscal 2014 and its following quarter, the company expects to lose up to $400 million, up from the $100 million estimate that was previously provided.
The filing reveals that unit sales to customers this past quarter stood at 5.9 million units, which is down from the 6.4 million units it sold in the first quarter. The bad news, unsurprisingly, is that BlackBerry 10 has failed to take off. BB10 was supposed to be the saviour, yet the filing reveals that out of 5.9 million devices sold, 4.2 million were running OS 7, which basically means that there hasn’t been widespread adoption of BlackBerry 10, even within the existing user base. The company acknowledges the fact that it is losing out market share in markets where it was going strong, particularly emerging markets, which are now being catered to by a barrage of low cost Android smartphones. BlackBerry says in the filing that competition which affected demand in the U.S. market is now being experienced globally, where “the company has historically experienced rapid growth.” It puts the blame on changing consumer preferences, which tilt toward ecosystems with “broadest number of applications,” iOS and Android are prime examples.
BlackBerry is also in the midst of going private, at least it is trying to. The company has received a $4.7 billion buyout bid from its largest shareholder, Fairfax Financial Holdings, which aims to buyout the outstanding shares for $9 apiece. Though analysts believe that Fairfax might back with an offer as low as $5 per share after its due diligence. The letter of intent BlackBerry has signed with it is non-binding and the deal depends on Fairfax acquiring the required funding, as well as shareholder approval.RELATED
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