Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) experienced the steepest fall in its shares since 2001 after posting a surprise loss and low sales of its latest touch screen devices. The sales figures reflect the fact that the company is losing the battle against iPhone and Android devices.
Sales number below estimates
In the last quarter, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) shipped 6.8 million phones including 2.7 million latest Blackberry 10 models. According to analyst’s estimates, the company should have shipped 7.5 million units in total along with 3.6 million Blackberry 10 units. The company held Venezuela currency controls responsible in part for its loss in the quarter as the control affected the revenue in Latin America.
QWERTY models popular
The QWERTY keypad is a strong selling point of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB), which the company is still waiting to capitalize upon. The phone has a strong demand amongst lawyers and professionals. However, the demand is weak compared to Apple Inc. (NASDAQ:AAPL) iPhone and Smartphone running on Google Inc (NASDAQ:GOOG) Android.
The stock slipped on Friday and washed away the gains made in the year reflecting that the optimism on the investors was a bit too much regarding the rebound of Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) against touch screen phones.
BBRY Stock tumbling
“The run-up in the stock was overdone,” said Erik Gordon, a University of Michigan business professor. “The company now is a niche player for the declining segment that clings to a physical keyboard,” he added.
The shares of Blackberry declined 29 percent to $10.25 quoting the highest intraday decline since January 2001.
For the first quarter, Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) recorded a loss of $0.13 per share excluding some items against the analyst estimates of profit of 8 US cents on average as per data of Bloomberg. The sales came in at $3.07 billion for the period ending June 1, less than analysts’ estimate of $3.37 billion. The subscriber base of Blackberry declined from 76 million to 72 million all over the world in the last quarter.
Kevin Stadtler, president of Texas-based Stadtler Capital Management said that Blackberry performed low on units, gross margin and earnings. Stadtler Capital Management owns 45,000 Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) shares. He said that results have not been encouraging so far.
In 2013, towards the end of January, Blackberry launched Z10 in the United Kingdom followed by launches in Europe and the United States. Another model Q10 equipped with QWERTY keyboard was launched in April in some markets and in the previous month it was launched in the United States.
Latin America and South Asia are the regions where Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB) is facing tough competition over price as there are a number of manufacturers providing low priced Android running phones.