“Did you hear about the new BlackBerry phones?” is probably not something you hear these days. Recent years have not been good to BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB), as iPhones and Samsung phones dominate the personal phone market.
With BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s recent quarterly report, investor sentiment is down. On top of a loss of $84 million (U.S.), its global subscriber base slipped by 4 million — its third straight quarterly loss — to 72 million amid reports that its new flagship handsets weren’t having the big bang impact everyone had hoped. The subscriber numbers, which had held firm through the company’s darkest period in 2012, are critical to BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s future. As a result, its share price is below $10 – the lowest in 8 months.
Focused on expanding BlackBerry Enterprise Service
“Our business model is changing with the launch of the BlackBerry 10 platform,” said Adam Emery, BlackBerry’s vice-president of communications. “While we continue to invest in the global launch of BlackBerry 10, we are not a devices-only company. BlackBerry 10 is meant to do more.”
Emery says the company is focused on expanding BlackBerry Enterprise Service 10 deployments — including supporting iOS and Android devices — as well as extending its BBM social messaging service across multiple platforms and leveraging its secure BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) Global Data Network.
Carmi Levy, an analyst at the Toronto Star said Emery’s comments reinforce how different the future company needs to be to remain a force in the mobile space. As much buzz as the Q5 will likely generate, an eventual complete exit from the handset market remains on the horizon. Blackberry CEO Thorsten Heins has repeatedly claimed all options are on the table, and the recently announced layoff of 250 people in the product test division suggests the drawdown in hardware has begun. The decision to kill the slow-selling PlayBook tablet is another sign BlackBerry is moving beyond hardware.
BlackBerry’s near-term challenge is a stark one
Levy noted that whatever form the future business takes, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s near-term challenge is a stark one. It needs to stay on buyers’ radar — which means a shift in marketing from launch-heavy campaigns to more sustained messaging that keeps the brand relevant long after a new device first hits store shelves. It needs to continue its push to engage developers and fill yawning gaps in its app store. And it needs to fulfill its promise to deliver BBM — both the app and all related services — to iPhones, iPads, Android devices, and any other platform that may emerge in future.