Industry expects BlackBerry to exit the handset market after CEO Chen sets profitability ultimatum
BlackBerry’s 16 year spell as a handset manufacturer will come to an end within the next 12 months as sales in B2B continue to dry up.
This was the overwhelming view from the industry last month, after BlackBerry CEO John Chen gave the handset division a year to return to profitability or face being axed.
Chen, who earns around $90 million a year at BlackBerry, made the ultimatum after the firm reported total losses of £450 million for Q1.
During his tenure, sales have dropped from around 28 million in 2013 to just seven million last year. With 2016 forecasts cutting that number in half and sales at an all time low in the channel, many believe its time is up.
“It really doesn’t look good for BlackBerry,” said Darren Ridge, CEO of the UK’s biggest B2B dealer by connections (250,000 plus), OneCom. “We’re selling less than 10 per cent of what we were in 2011. Back then we had a multi-million pound BlackBerry account and now it doesn’t really figure on our radar anymore. If Microsoft can’t make it with Windows, then BlackBerry has got no chance.”
CEO of Vodafone Platinum Partner Evolve Telecom Mark Gordon told a similar story: “We were selling around 500 BlackBerry’s a month four or five years ago, but today those numbers are minimal. There are so many alternatives on the market. They’re going to struggle to survive and I can’t see the longer term viability for them in continuing to manufacture devices.”
Paul Davis, managing director of O2 Direct Partner network dealer Aerial Business Communications: added: “The hardware side is finished. Three or four years ago we were selling a couple of thousand a month before the iPhone came out. If we even sold 10 BlackBerry handsets a month now, I’d be surprised.”
A number of the UK’s leading distributors have also noted a “rapid” decline in BlackBerry sales in the last year after an initial jump from the release of the Passport in 2014.
Sales of the Priv, its first device to run on Android are said to have been minimal, with sources at Carphone Warehouse, who held the exclusive on the device between its October launch and December – saying numbers only reached a “few hundred”, during the period, blaming its £600 SIM-free price tag.
Return rates are said to have been high also, due to overheating issues. As Mobile News went to press, BlackBerry confirmed it had also stopped production of its Classic model after 18 months.
One leading B2B airtime distributor added sales of BlackBerry devices had fallen to less than 10 a month, with little to no demand.
“Sadly it looks as if its time is up. There was a time when we couldn’t get enough BlackBerry handsets. It was the device to have if you were in business. Unfortunately, times moved on, and BlackBerry failed to move on.”