BlackBerry 10 was the company's next-generation operating system that would allow it to compete with the likes of Apple and Google. The operating system would power its smartphones and was also promised to be an upgrade for owners of its BlackBerry PlayBook tablet, but after the company reported its dismal earnings on Friday, it announced it was cancelling BB10 for the PlayBook.
It appeared as if things were headed in the right direction for BlackBerry in the last few months. It surprised investors by posting a profit last quarter and analysts claimed that sales of the Z10 and Q10 were strong. However, the company's latest earnings report show that things are not going the way it seemed. BlackBerry reported revenues of $3.1 billion and it shipped 6.8 million smartphones, but it incurred a loss of $84 million. The company refused to break down Z10 and Q10 shipments but said that 40 percent of the 6.8 million devices shipped were BlackBerry 10 devices, which means it only sold 2.7 million BB10 smartphones and sold more of its previous generation smartphones. BlackBerry also warned investors that it expects it will generate an operating loss in the second quarter. This news sent BlackBerry's stock to plummet more than 20% during pre-market trading.
The bad news didn't end there. BlackBerry CEO, Thorsten Heins revealed that the company was cancelling its plan of bringing BB10 to the BlackBerry PlayBook tablet. He claimed that he was not satisfied with the user experience that BlackBerry 10 provided on the PlayBook and he had to make the difficult decision of canceling the plan and would instead focus on the company's core hardware products, smartphones.
BlackBerry's future doesn't seem nearly as bright as originally thought. Its latest earnings are a huge disappointment, sales of BlackBerry 10 smartphones were much lower than anticipated and it's now abandoning the tablet market. The company is going to need much more than its new operating system and QWERTY-equipped smartphones to bring the once smartphone king back into the kingdom it helped build.
