The news
comes as Apple released two new iPhones on Friday which analysts predict will
sell 5m in the opening weekend
 |
| The struggling smartphone firm said it expects to lose nearly $1bn on disappointing sales of a new device. Photograph: Mast Irham/EPA |
BlackBerry
confirmed it was firing 4,500 of its staff on Friday as the struggling
smartphone firm said it expects to lose nearly $1bn in the three months to
August on disappointing sales of new phones.
Revenues
for the three months were only $1.6bn, the company said, against analysts'
forecasts of $3bn – indicative of a collapse in its business after lacklustre
sales of its new Z10 and Q10 phones. In all, it shipped 3.7m smartphones in the
quarter, its lowest since summer 2007, when the first iPhone came out.
The
company's shares crashed from $10.20 to $8.03 before recovering to $8.73, a 17%
drop on the day, valuing it at $4.5bn. The shares were briefly suspended as
rumours of the loss circulated, and it was forced to indicate its quarterly
earnings a week ahead of their scheduled date. It said it would announce a loss
of between $930m and $955m next week.
That brings
its total losses in the past seven quarters to $1.8bn, putting its viability as
a going concern into question.
The company
announced it was putting itself up for sale at the end of August – which market
observers took to indicate it had failed to find a buyer privately. Microsoft's
acquisition of Nokia this month effectively left the Ontario-based company in
the cold.
Though
Canada's Fairfax Holdings is believed to be trying to put together a private
equity buyout, others think it will be sold off piecemeal.
The company
blamed the loss partly on "more intense competition" following poor
sales of the Z10 and Q10, released in January and April.
Apple
launched its two latest iPhones yesterday, which analysts were predicting could
sell 5m in the opening weekend.
BlackBerry's
firings follow the loss of 5,000 jobs last year and a smaller round of
redundancies this summer. The new losses will reduce Blackberry's 12,700-plus
global workforce by about 40%. Expenses will be cut by 50% by the end of the
first quarter of 2015, the company said.
BlackBerry's
share of the smartphone market has plummeted as Apple and devices from Samsung,
HTC and others have taken its once sizeable lead.
BlackBerry
had over 14% of the US smartphone market in 2011 but, according to research
firm IDC, it now has under 3%. Once the market leader, it now trails in fourth
place behind Microsoft's Windows Phone brand, devices powered by market leader
Google's Android system and Apple, IDC says .
Thorsten
Heins, the BlackBerry chief executive, told Bloomberg in April that the Q10
could sell "tens of millions". So far the figure appears to be
below 5m.
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