BlackBerry announces a $1 billion loss and a doomed plan to dig itself out

Blackberry still has its fans, but they’re not enough to save the company.
Blackberry still has its fans, but they’re not enough to save the company.
Image: AP Photo/Charles Dharapak
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BlackBerry isn’t supposed to announce its quarterly results until next week, but already the company has admitted that they will include a $1 billion loss and will result in layoffs of 40% of the company’s workers. As just about everyone has predicted, the company will soon be forced to do something drastic, which might including selling itself.

The full release on BlackBerry’s disastrous results includes a plan for recovery: to double down on the company’s enterprise products and customers. But that almost certainly won’t work. (More on that below.)

Company to refocus on enterprise and prosumer market, offering end-to-end solutions, including hardware, software and services.

Future smartphone portfolio will transition from 6 devices to 4; focusing on enterprise and prosumer-centric devices, including 2 high-end devices and 2 entry-level devices

Why it’s too late for BlackBerry to return to its enterprise roots

Enterprise has always been BlackBerry’s strength, but there are some major drawbacks to falling back on business and government customers. BlackBerry’s phones lagged in features and the company’s dwindling market share failed to attract the app developers who are the core strength of both the iPhone and Android phones. Meanwhile, both Apple and makers of Android handsets like Samsung have been busy capturing the enterprise market by making their phones evermore business-friendly.

Samsung’s SAFE (Samsung for Enterprise) has been available on new Galaxy smartphones since June of 2012, and the company recently followed up with a very BlackBerry-like security technology called Knox—as in the fort where the US keeps a large supply of gold. Apple has added all sorts of enterprise-friendly features to its iOS 7, making the two platforms more or less competitive with each other, not to mention with BlackBerry, for even the most demanding enterprises.

These programs, and the allure for employees already accustomed to using Android and iPhones as personal devices, have worked against BlackBerry. In October 2012, the US Department of Defense dropped BlackBerry’s exclusive contract for smartphone services, as did US Immigrations and Customs Enforcement, which moved to iPhones. There are rumors that Samsung is about to score huge contracts with the FBI and Navy. Apple has been winning big contracts all over the world.

So while while BlackBerry was busy trying to compete with Apple, Google and Microsoft for everyday consumers, it missed opportunities to expand on its base of enterprise customers. Investors had floated the plan to double down on the enterprise market a while ago but failed to raise the billions needed to execute it. By now, it’s probably too late. Get ready for the dismantling of BlackBerry.