Blackberry's eager little group of fans is shrinking

What now?

I cannot remember the last time a friend or colleague chose to go with a BlackBerry. It seems I am not alone. Blackberry has just released a fairly calamitous set of results for the first quarter. On an underlying basis, BlackBerry posted a loss of $67m; analysts had forecast a small profit and revenue of $3.4bn.

What is really surprising is that BlackBerry does not seem to have reported how many of its BB10 units it sold in the first quarter. That rather begs the question: do they not know the answer or is the figure so dire they want to keep quiet about it. On a very quick straw poll around the office, I found one brave soul prepared to admit that he had considered buying the latest BlackBerry.

One. Out of more than 20 people.

There was a time, not so long ago, when BlackBerry had its own little group of loyal fans, ever-eager to highlight the alleged attractions of the Blackberry when compared to Apple’s iPhone and the various Android devices. According to the firm, BlackBerry’s most recently launched devices were designed to bring back loyal customers to the fold. That project seems to be failing.

Except we do not know exactly the extent of the failure until and unless BlackBerry own up to the number of units sold in the first quarter. BlackBerry said that it sold 6.8m handsets in the quarter, up 13 per cent from the last quarter of 2012 – but gave no hint about how many of the 6.8 million phones were BB10 devices. Analyst forecasts suggested that BlackBerry would sell 7.5 million units in total in the quarter. So a big miss. The earnings got worse – or funnier – depending on your point of view. BlackBerry declined to predict how many handsets it will sell in the remainder of 2013.

It really is quite a fall from grace. BlackBerry was the original smartphone, predating the iPhone and winning plaudits long before Samsung Galaxy’s dominated the Android sales charts. The Q10 handset was released in March to generally favourable reviews from the tech geeks.

It is not cheap. This morning, Amazon had nine available for sale, at £480 each. For that sort of money, one can buy the most recent Galaxy S4 (£465) or the iPhone 5 (£470). The market viewed BlackBerry’s results with horror this morning: at one stage in pre-market trading, the stock was down 24 per cent. The price recovered a little to be down a mere 16 per cent when trading commenced.

So what next for BlackBerry? Only two weeks ago, Societe Generale sent out a note to clients upgrading its rating on BlackBerry to Buy. The fourth-largest US bank, Wells-Fargo issued an upbeat assessment for BlackBerry as recently as 14 June. Not every analyst is negative regarding BlackBerry by any means and the stock price is certainly volatile.

It kicked off 2013 with a share price of CS11.60; despite todays bad news, the share price is up more than 25 per cent for the year to date at C$15 but well down on its year-high price of C$18. No doubt there will be scribblers out there rushing to suggest that BlackBerry is the next Palm and that BlackBerry’s days are numbered. BlackBerry is no palm; not yet anyway.

Its cash position is strong. It has over £7bn in assets compared with les than $4bn in total liabilities. But it needs to give the market a little more guidance on how the latest device is selling. And it really could do with a strong second quarter.

Photograph: Getty Images

Douglas Blakey is the editor of Retail Banker International

Photo: Getty
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Can Philip Hammond save the Conservatives from public anger at their DUP deal?

The Chancellor has the wriggle room to get close to the DUP's spending increase – but emotion matters more than facts in politics.

The magic money tree exists, and it is growing in Northern Ireland. That’s the attack line that Labour will throw at Theresa May in the wake of her £1bn deal with the DUP to keep her party in office.

It’s worth noting that while £1bn is a big deal in terms of Northern Ireland’s budget – just a touch under £10bn in 2016/17 – as far as the total expenditure of the British government goes, it’s peanuts.

The British government spent £778bn last year – we’re talking about spending an amount of money in Northern Ireland over the course of two years that the NHS loses in pen theft over the course of one in England. To match the increase in relative terms, you’d be looking at a £35bn increase in spending.

But, of course, political arguments are about gut instinct rather than actual numbers. The perception that the streets of Antrim are being paved by gold while the public realm in England, Scotland and Wales falls into disrepair is a real danger to the Conservatives.

But the good news for them is that last year Philip Hammond tweaked his targets to give himself greater headroom in case of a Brexit shock. Now the Tories have experienced a shock of a different kind – a Corbyn shock. That shock was partly due to the Labour leader’s good campaign and May’s bad campaign, but it was also powered by anger at cuts to schools and anger among NHS workers at Jeremy Hunt’s stewardship of the NHS. Conservative MPs have already made it clear to May that the party must not go to the country again while defending cuts to school spending.

Hammond can get to slightly under that £35bn and still stick to his targets. That will mean that the DUP still get to rave about their higher-than-average increase, while avoiding another election in which cuts to schools are front-and-centre. But whether that deprives Labour of their “cuts for you, but not for them” attack line is another question entirely. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.

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