BlackBerry Reports 1 Million BlackBerry 10 Sales

The BlackBerry 10, as seen during the company’s unveiling event.

BlackBerry managed to earn a profit of $94 million in the fourth quarter of its fiscal 2013, and reported sales of roughly 1 million BlackBerry 10 devices.

That’s good news for the beleaguered company, which is betting its future on the new BlackBerry 10 operating system. Although 1 million isn’t a groundbreaking number—Apple’s iPhone 5 sold five million units in its first weekend—it’s a sign that the BlackBerry Z10 smartphone has managed to gain some traction with users around the world. BlackBerry (known until recently as Research In Motion) managed to sell 6 million BlackBerry smartphones overall, along with approximately 370,000 BlackBerry PlayBook tablets.

Once the dominant smartphone among enterprises and government agencies, BlackBerry watched its market-share crumble in the face of fierce competition from Android and Apple’s iOS, especially as more companies opted for “Bring Your Own Device” policies. In an attempt to hit the reset button, the company built BlackBerry 10, which abandons the longtime BlackBerry user interface (centered on grids of icons) in favor of one built on the same QNX technology that powers the PlayBook tablet.

The BlackBerry 10 home-screen offers “live tiles” that dynamically refresh with updated information. It also includes features such as a revamped keyboard, various privacy and security upgrades, and an updated version of BlackBerry Messenger.

BlackBerry’s quarterly revenues totaled $2.7 billion. In a somewhat worrying sign, the BlackBerry subscriber base shrunk to 76 million, down 3 million from the previous quarter. The best-case scenario for BlackBerry is that, as more BlackBerry 10 devices enter the market in coming months (including ones with a physical keyboard, prized by many old-school BlackBerry subscribers), that subscriber base will stabilize or even begin to climb again.

In a research note released before BlackBerry announced its quarterly results, Ovum analyst Jan Dawson suggested that “several factors” had worked against the company’s sales numbers. “Firstly, [BlackBerry Z10] was only on sale for about a month before the end of the quarter, and critically didn’t launch in the US until several weeks later,” he wrote. “Secondly, the Q10, which has the classic BlackBerry hardware keyboard, won’t go on sale for some time still, so many of the prime candidates for buying a BlackBerry 10 device will be waiting for that.”

In light of that, he concluded, “even though many observers will see this quarter’s performance as a referendum on BlackBerry 10, they should instead wait for the next quarter’s results, which will be a much better indicator of the long-term success or failure of the platform.”

Lazaridis Resigns

BlackBerry also announced that Mike Lazaridis, who co-founded the company in 1984 and served for nearly three decades as its co-CEO alongside Jim Balsillie, would retire from the board of directors.

“I admire Mike for his many achievements and for his vision in helping bring BlackBerry 10 to fruition,” Heins wrote in a statement. “On a personal level, I am grateful to Mike for his help, guidance and advice during my first 15 months as CEO of BlackBerry. I wish him all the best.”

Lazaridis issued a statement that read, in part: “I believe I am leaving the company in good hands. I remain a huge fan of BlackBerry and, of course, wish the company and its people well.”

The departure comes almost exactly 12 months after Jim Balsillie resigned from BlackBerry’s board, and marks the true closing on an era: although Lazaridis and Balsillie were lauded as visionary executives during Research In Motion’s ascendant years, analysts and customers were quick to blame them for many of the firm’s subsequent problems, including its inability to counter rising competition from Apple’s iPhone and Google Android.

What Now?

So what happens now? Back in January, Heins suggested to German newspaper Die Welt that his company would consider various strategic options in the wake of BlackBerry 10’s launch, “including the sale of hardware production [and] licensing our software.” Time is running short: the various Android manufacturers show no signs of slowing down, Apple continues to sell millions of iPhones every quarter, and Microsoft is determined to make Windows Phone the world’s third-ranked smartphone platform.

And it’s definitely an uphill battle. “So far, customers and developers have been lukewarm to adopt new platforms including Windows 8 and webOS despite strong reviews and carrier interest,” Shaw Wu, an analyst with Sterne Agee, wrote in a January research note. “To us, it’s not just the number of apps, but the quality of apps and whether developers are making money and customers are using them.”

 

Image: BlackBerry

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