How to Spin a Billion-Dollar Crash-and-Burn

BlackBerry lost $965 million in the second quarter of its current fiscal year, according to the company. Those losses stemmed largely from unsold Z10 smartphones, the flagship BlackBerry 10 device that BlackBerry executives hoped would reverse their company’s declining fortunes.

It’s difficult to hide losses of that magnitude behind any amount of corporate-speak, and BlackBerry’s press release (PDF) about its quarterly results doesn’t try very hard to obfuscate; even its overall revenues of $1.6 billion are a fraction of what rivals such as Apple and Google earned last quarter.

But here comes the attempt to spin: “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 CEO Thorsten Heins wrote in a statement, “where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013.” (BES 10, also known as BlackBerry Enterprise Service 10, is the company’s management platform for corporate devices.)

Acknowledging the “uncertainty” created by the company’s implosion (as well as his disappointment with the company’s overall financial and operational results), Heins added that BlackBerry remains “a financially strong company with $2.6 billion in cash and no debt,” ready to become a “more focused and efficient company.”

Earlier this week, a consortium led by financial-holding company Fairfax Financial agreed to acquire BlackBerry for $4.7 billion, a move currently under review by BlackBerry’s board of directors. It remains to be seen whether the acquisition, should it go through, will affect BlackBerry’s stated plans to lay off thousands of employees over the next few quarters. What’s better known is that BlackBerry intends to retrench around its corporate audience—hence that shout-out in the press release to BES 10—but even that’s a risky move at a time when seemingly every corporation readily embraces a mix of mobile and infrastructure solutions.

 

Image: Goncalo Veloso de Figueiredo/Shutterstock.com

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