Just another $1-billion Write Off

On Friday September 20, 2013, Blackberry announces that it will write off $1-billion worth of phones and part and also cut 40 percent of their current workforce in an attempt to save the company from free fall. This write off is largely due to an inventory surplus of Blackberry’s new Z10 smartphone. The lack of sales in the smartphone division will result in a quarterly revenue of under $800-million, significantly less than the $1.7-billion it reported a year ago. This news shocked investors’ confidence resulting its share prices tumbling 16 percent.

Blackberry’s decision to compete with smartphone giants, Apple and Samsung, inevitably backfired. The poorly marketed Z10 smartphone was unable attract consumer attention with an unimpressive value proposition, hindering its ability to differentiate itself. Instead of attempting to compete with Apple or Samsung, Blackberry should shift their focus on their two larger customer segments: governments and corporations. Since its founding, Blackberry was able to capture this customer base with its encrypted e-mail and web-browsing technology. If Blackberry continues to focus its resources on the consumer smartphone industry, the question won’t be will Blackberry succeed. It will be when the giant from Waterloo fall.

BlackBerry Z10 Advertisement

Source:

http://www.theglobeandmail.com/report-on-business/trading-in-blackberry-halted/article14440386/