Android squeezing BlackBerry's global sales

Android squeezing BlackBerry's global sales

Summary: The Canadian smartphone maker tells regulators that growth in international markets is being affected by competition from low-cost Android smartphones.

TOPICS: Mobility

Demand for BlackBerry handsets outside of Europe and the US is on the wane, threatening some of the few remaining growth markets for the handset maker.

Sales of handsets in international markets are being squeezed by competition from low-cost Android smartphones and buyers being put off by the lack of apps for BlackBerry phones, the Canadian firm wrote in a filing to the US Securities and Exchange Commission (SEC) published yesterday.

"The intense competition impacting the company's financial and operational results that previously affected demand in the United States market is now being experienced globally, including in international markets where the company has historically experienced rapid growth," the filing said.

The filing follows BlackBerry's financial results being released last Friday where it announced losses of $965m during the second quarter of this year. Much of these losses came from a write-down of inventory phones using the new BlackBerry 10 operating system, which were designed to compete with Android and iPhones.

Most of the 3.7 million BlackBerry smartphones shipped during the quarter were the previous generation BlackBerry 7 handsets, although BB10's poor showing was in part because revenue on some BlackBerry 10 devices shipped during the quarter were not included in these figures.

Hardware revenues for the quarter declined $942m, or 55 percent, over the same period the previous year.

"The company believes that the significant decrease in hardware revenue and device sales over the prior fiscal year was primarily attributable to decreased demand and lower sell-through for the Company's new products, due to the maturing smartphone market and very intense competition, as well as lower average selling prices compared to the second quarter of fiscal 2013," the filing said.

"Additionally, delays in the launch of certain functionality of the BES 10 platform and alternative competitor products in the market have resulted in a slower than anticipated rate of adoption of the BES 10 platform by enterprise customers, many of which look to deploy BlackBerry 10 hardware and software simultaneously to optimize security through the integrated BlackBerry end-to-end solution."

The BlackBerry Z10, which introduced the new line in January, will be sold as the company’s low-priced entry level touch-screen phone, it said.

BlackBerry's services business also saw revenues decline, falling 27 percent to $724m.

Europe, the Middle East and Africa (EMEA) accounted for the largest share of BlackBerry's $1.573bn revenue for the three months to the end of August this year. While EMEA accounted for about 44 percent of revenues, the proportion of BlackBerry's takings from North America stood at $414m or about 26 percent.

The company repeated its earlier pledge that it intends to lay off about 4,500 people, about 40 percent of the workforce. These layoffs are expected to cost the company about $400m in charges, according to the filing, up from a previous estimate of $100m.

More on BlackBerry

Topic: Mobility


Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

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  • Now HERE'S a news flash.

    "The Canadian smartphone maker tells regulators that growth in international markets is being affected by competition from low-cost Android smartphones."

    Really? Never saw THAT one coming.

    Pretty much sums up the reason for BB's current crappy state of doesn't it.
    • Same with the "slower than anticipated rate of adoption of the BES 10"

      Really? No not at all. Slower than projected, yes. Slower than BB expected, unlikely unless they truly are delusional, but maybe. But slower than anyone else in the mobile industry with half a brain expected? Certainly not. Right on par. And is anyone surprised that the layout charge estimate went from $100M to $400M? Again no not at all. Expect continuing declines and bas news all around from BB going forward. If Fairfax can line up the financing for the buyout the pope will certainly deem it a miracle. Shareholders will be extremely lucky to get that $9 if it happens. They'll have to be fast to get $6 if it doesn't. Who wants to catch that falling knife. License the patents and turn out the lights. This source of Canadian tax revenue is disappearing, hang onto your wallet tar sands, here we come.
      Johnny Vegas
  • BB is their own worst enemy...

    I think BB is their own worst enemy. The quality of their phones are not the best, the OS doesn't seem to have any support from the large application developers, and then they strand the people that wasted money on their tablets out in the cold. Why BB thinks at this point that anyone wants to buy their products is beyond me.
    Jake Campbell