BlackBerry now in 'handset death spiral'
BlackBerry's fortunes hit a new low last week: faced with the news that sales, already depressed, were down a further 41% year-on-year, analysts struggled to find words to describe adequately what was happening to the once mighty Canadian company.
Edward Snyder, of Charter Equity Research, was one of the kindest: "Wow, what a disaster." But this pales into insignificance compared with Matthew Thornton, of Avian Securities, saying that looking at the company was "like watching a puppy die".
Worse still, BlackBerry-maker Research in Motion has pushed back the launch of its forthcoming operating system, BlackBerry 10, to next year. Remaining products will be based on old technology and face the gathering momentum of new Windows Phone8 and iPhone5 devices, along with the continued growth of Google's dominant platform, Android.
IDC analyst Kevin Restivo said that unveiling BB10, when it finally comes, "would be like launching fireworks underwater".
Snyder said BlackBerry was already in "a handset death spiral" from which it may struggle to escape.
BlackBerry's new round of bad news came as some were beginning to think that it might not be as doomed as previously suggested. After demonstrating a prototype device at the BlackBerry World Conference, in Orlando, Florida, earlier this year, some thought that an exceptional screen, impressive build and some clever features, such as being able to pan around a photograph on screen simply by moving the phone, might yet be pointing to a brighter future.
This week in San Francisco, Google announced that 1million phones and tablets using its Android operating system are activated each day. BlackBerry said in the most recent quarter that it sold 7.8million handsets.
The losses - 37c a share compared to an expected 3c - have increased the pressure on BlackBerry's board to consider previously unpalatable options. Selling part of the business, or moving to Microsoft's operating system, are just two of them.
Microsoft CEO Steve Ballmer is said to have approached BlackBerry but the firm will no doubt look at the declining sales of Nokia and Microsoft's willingness to hurt short-term sales by announcing distant improvements.
That makes RIM's prospects even bleaker and, as Shaw Wu, of Sterne Agee, observed, its plan to make 5000 more redundancies will burn through the cash pile it needs to launch new BlackBerry devices upon which its survival depends.
All of this marks what could be the beginning of the end of a once great brand - many commentators continue to doubt whether even Nokia will survive, despite its new relationship with Microsoft.
Thorsten Heins, RIM's new CEO, justified the latest failure to launch BB10 by saying that he would not compromise customers' experience by launching a half-baked product. But ever since Apple and Google entered the market, BlackBerry's failings in devices have been masked by profits bolstered by sales to young people on a budget.