BlackBerry’s Strategy for 2014

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4Q 2013 | IN-1018073

 

Inventory Write-offs Continue for BlackBerry

NEWS


BlackBerry’s revenues fell to US$1.2 billion in 3Q 2013 from the US$1.6 billion it posted in its 2Q 2013, while sales of smartphones slumped from 3.7 million to 1.9 million. Perhaps most damning was the fact that most of the handsets it sold were still running the BlackBerry 7 platform by a ratio of three to one versus BlackBerry 10.

Around half of the company’s revenue was generated from services, with hardware accounting for just 40% (historically this has been between 70% and 90%) and software and other income adding up to 7%. The company also decided to cancel two as-yet-unreleased smartphones in order to “mitigate the identified inventory risk,” according to an earnings-related filing for 3Q 2013. The losses of US$4.4 billion for that quarter were due in part to the write-off of nearly US$1 billion in unsold phone inventory in 2Q 2013 and another $1.6 billion in 3Q 2013.

The new CEO John...

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