BlackBerry CEO John Chen hinted at the company’s plan of unveiling at least one more Android device this year, and it appears investors don’t like it. On Thursday, the Canadian firm’s stock slid, marking its worst day in almost a year.
What triggered the decline?
BlackBerry’s global market share in the smartphone industry has declined below 1%, and at this critical point, manufacturing new handsets indicates that the company will be incurring more costs, resulting in lower profits. The company’s shares fell to $8 at Thursday’s close in New York, marking the biggest decline for the company since January 2015.
On Wednesday, Chen stated that he is expecting the smartphone division, which has been losing money for the past several years, to turn profitable soon. Citing an interview with Chen, CNET reported earlier that in 2016, the company plans to produce yet another phone running on Android. The CEO said he won’t give up on the handset manufacturing business if he succeeds at making it profitable. An analyst at BGC Financial LP, Colin Gillis, said that some investors believe BlackBerry should ditch its device business altogether and focus on growing software revenue.
“For those people looking for BlackBerry to become much leaner, much less capital-intensive, the handset business might be considered a disappointment,” Gillis said.
Marshmallow update for BlackBerry Priv soon
BlackBerry launched the Priv with Android 5.1 Lollipop pre-installed, and it is expected that soon the company will update the device to the latest Android version, Marshmallow. There have been reports that the update will happen in 2016, but when is still a mystery.
Ron Louks, an executive with BlackBerry, said during CES 2016 that the company will make an announcement regarding the Android 6.0 Marshmallow update in the first quarter of 2016. This means that in the next couple of months, we can have a definite date. It can be assumed that there won’t be much of a gap between the announcement of the date of release and the actual release.
On Thursday, BlackBerry stock dropped 8.47% to close at $8, while the NASDAQ was down by over 3%. Year to date, the stock is down by almost 14%, while in the last month, it is up by over 5%. The stock has a 52-week high of $12.63 and a 52-week low of $5.96.