BlackBerry sales have dropped by half in just three months, with the company confirming a $965m loss for its second quarter.
The ailing smartphone maker warned last week that it was likely to make a near $1bn loss, due mostly to a write-off of $934m caused by unsold inventory for its Z10 device – launched to great fanfare earlier this year.
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The financial results announced today confirmed the scale of losses, and also revealed that revenue has slumped to $1.6bn – a drop of 49% since the previous quarter, and down 45% from $2.9bn in the same period last year.
BlackBerry also announced last week that it is cutting 4,500 jobs worldwide – 40% of its workforce. This week it also received a $4.7bn buyout bid from one of its biggest shareholders, Fairfax Financial Holdings, a Canadian finance firm that mostly specialises in insurance.
The revenue breakdown for BlackBerry’s second quarter was 49% for hardware, 46% for service and 5% for software. The company sold just 5.9 million BlackBerry smartphones to customers in the three-month period – by comparison, Apple sold more than nine million new iPhones in the first weekend after its launch.
“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure," said Thorsten Heins, president and CEO of BlackBerry.
"While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10 [BlackBerry Exchange Server 10], where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013.”
BlackBerry launched the Z10 – the company’s first full touchscreen device – at the start of 2013, as the flagship product intended to recover the firm’s position as a smartphone market leader. Despite positive reviews for the Z10, it has so far failed to capture buyer’s interest.