BlackBerry: Fewer Sales, More Layoffs

Even with the February introduction of BlackBerry's new Z10 Smartphone, the company was unable to turn around sales and meet expectations of analysts and, more importantly, investors when it announced first-quarter sales at the end of June. In an attempt to step up its game, the Waterloo, Ontario, smartphone company is now cutting down staff.

According to a Wall Street Journal report on the annual shareholder meeting held on Tuesday, Chief Executive Thorsten Heins told shareholders the company needed more time to recover losses. Richard Piasentin, vice president of sales at BlackBerry, was fired in June and more layoffs across middle management are expected in the coming months. Last year, the company let a total of 5,000 employees go.

Partners praise the new BlackBerry devices and defend the company's commitment to delivering quality hardware for businesses, but are unsure if that will be enough.

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"The Z10 is a great device," said Michael Wieser, chief mobility officer of New York-based Breakthrough Technology Group. "BlackBerry loyalists seem to really like it. It has been pretty well-received by users who have upgraded from older BlackBerry devices, but I’m not seeing as much success in regaining customers who have already jumped ship to [other smartphone brands]."

"I just started using the newer BlackBerry model," said Manika Sood, president of Newport, N.J.-based mobile solution provider Saturn Wireless. "I've switched from a BlackBerry to an iPhone to an Android device, and now I have switched back to BlackBerry. I have found it's designed more for the business world."

Although BlackBerry had established itself early in the business market as one of the most secure mobile devices available, it seems the company cannot rely on the secure business niche to protect it from competitors.

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"Somehow, they have to try to [make] BlackBerry [appealing] to a younger market. You don't find BlackBerrys in the hands of 20-year-olds. They need to somehow make BlackBerry cool again," Wieser said. Wieser added that he had been looking forward to the BlackBerry 10 line for a long time, noting the company took too long to release it.

"The devices may be great, but they are about a year or two too late. I don't understand why they dragged their feet so long," Wieser said.

"Unfortunately, I think BlackBerry has lost a lot of its users who are attracted to jazzier devices. I don't know if they will be able to get them back," Sood said.

On the enterprise side, Wieser remembers a day when BlackBerry provided its partners with more marketing incentives and programs that included large events, attracting scores of resellers and solution providers.

"I think they lost a lot of people when they got rid of those programs," Wieser said. "I would love to see them reinstate some kind of loyalty program to their dealers and resellers."

According to a BlackBerry report, it shipped 6.8 million handsets the first quarter of the 2014 fiscal year, an $84 million loss on handsets alone. In addition, the company waved goodbye to 4 million subscribers, bringing the final subscriber total to 72 million. Although BlackBerry totaled $3.1 billion in sales, it still suffered a dip of 13 cents per market share.

BlackBerry's newest smartphone, the Q10, was released only two weeks prior to the company releasing its first-quarter statistics, giving it little time to affect BlackBerry sales for the first quarter. BlackBerry did not return requests for comments at press time.

PUBLISHED JULY 12, 2013