BlackBerry (BBRY) has been circling the drain for some time, with operations now running in the red and the stock off over 90% from its pre-recession highs.
BBRY has tried to keep a brave face, banking on the launch of its Q10 and Z10 smartphones this year, but poor reception of the new BlackBerry gadgets have made the reality painfully clear.
Namely, that BlackBerry is doomed.
Now, BBRY isn’t going bankrupt tomorrow, and surely Apple (AAPL) iPhones and Google (GOOG) Android devices will never be the only options. There’s room for a third and maybe even fourth player in the smartphone and tablet space.
But BlackBerry ain’t it, friends. This company is about to disappear.
Consider the following ugly BBRY reports:
BBRY Writedowns Loom: Thanks to anemic sales of the BlackBerry Z10 and Q10, expect big writedowns at BBRY in the next quarter or two — akin to the $900 million writeoff Microsoft (MSFT) had to record thanks to overproduction of its Surface RT tablet coupled with slow sales out of the gate.
Gutted BBRY Work Force: This week, the Wall Street Journal reported that 40% of BlackBerry employees could get pink slips by year’s end — and that’s after recent cutbacks were already showing a sharp downward trend in the BBRY work force. Layoffs on that scale are a sign of a company in panic, not a company with a bright future.
BlackBerry Fire Sale: The BBRY writedowns and layoffs may be the first steps in cleaning up the company for sale, but don’t fool yourself into thinking this will be a purchase by a white knight that will turn around the troubled tech stock. While individual segments of the company are attractive, as a whole they are actually worth less — so a BlackBerry buyout would be motivated by a desire to sell BBRY stock for parts to its competitors, not to preserve the company.
BBRY Market Share: Microsoft has been pushing hard to get the No. 3 spot in the hardware market from BlackBerry, and with its deep pockets and enterprise push, it seems to have finally won. MSFT and Windows Phone handily beat BlackBerry in a host of major markets this summer to win third place in global market share behind Android-powered phones and iPhones running Apple iOS.
To make matters worse, this stripping down of BBRY is happening even as the company continues to waste money on doomed endeavors such as the Z30 phablet — a cross between a smartphone and tablet that BlackBerry launched this week. The gadget has a huge 5-inch screen, but given BlackBerry’s failure with the PlayBook tablet and recent shunning of its phones … why would this be a good idea?
Related Reading on BBRY
- On BlackBerry’s latest launch, the Z30 launch and its specs. (CNET)
- From June: BlackBerry 10 gadgets are “not a hit.” (CNN Money)
- On BBRY layoffs this week. (WSJ)
- How BBRY stock makes even investing greats look foolish. (InvestorPlace.com)
- Microsoft and Windows Phone are officially No. 3 worldwide. (BGR)
Jeff Reeves is the editor of InvestorPlace.com and the author of The Frugal Investor’s Guide to Finding Great Stocks. Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.