As part of its streamlining program, BlackBerry Limited (NASDAQ:BBRY) (TSE:BB) sold its U.S. headquarters in Irving, Texas to Canadian real estate company, Brookfield Property Group. However, financial details of the deal have not been revealed.
In 2009, BlackBerry had bought the 460,000-square-foot Irving property for headquarters. However, the company will leaseback 37% of the property to maintain operations. In 2013, the company announced its intent to lay off around 40% of its employees and halve its operating cost by May 2014. The company is also planning to sell its offices in Canada in the soon.
BlackBerry is facing severe headwinds such as an ever-increasing competitive landscape, a stagnant product portfolio and an unfavourable product mix. The company is also facing stiff competition from Apple Inc.’s (NASDAQ:AAPL) iPhone and Google Inc.’s (NASDAQ:GOOG) Android. Thus, the company is gradually shifting focus from handset business to enterprise services.
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In the third quarter of fiscal 2014, BlackBerry Limited (NASDAQ:BBRY) (TSE:BB) sold a mere 4.3 million smartphones as against Samsung and Apple’s 83 million and 50 million smartphones, respectively. Quarterly operating loss of $5,025 million compared unfavourably with an operating loss of just $230 million in the year-ago quarter. The dismal performance was mainly buoyed by writing down of long-lived assets valued nearly $2.74 billion.
The recent trade-in program arranged by T-Mobile US Inc. (TMUS) — primarily for BlackBerry customers — further confirms the latter’s rapidly declining popularity. The deal promised BlackBerry users a lucrative $200 for trading in their devices for a new handset. However, the program proved pricey for BlackBerry as 94% of its users shifted to rival brands.
BlackBerry Limited (NASDAQ:BBRY) (TSE:BB) currently has a Zacks Rank #3 (Hold).