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Failed BBM for Android, iPhone launch is the latest in BlackBerry's woes

Updated: September 22, 2013, 3:30 PM IST
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Failed BBM for Android, iPhone launch is the latest in BlackBerry's woes
Blackberry, which failed to roll out the BBM app for Android and iPhone successfully, now plans to shed 4,500 jobs.

New Delhi: Struggling smartphone maker BlackBerry, which is already going through a tough phase due to poor sales and bad market performance, faced a major setback after it failed to roll out the BBM app for Android and iOS as per the schedule.

While BlackBerry was expected to go smoothly with the launch of its much-awaited BBM app for Android and iOS, the company has goofed up the entire rollout process.

BBM for Android was scheduled to arrive on the Google Play Store at 4:30 PM IST (7 AM EDT) on Saturday, and on iOS a day later. The company failed to rollout the app for Android, but it successfully released the app for iOS as per the schedule. However, later the company halted the entire rollout process - citing technical issues.

BBM for Android and iPhone delay

It sounds so unprofessional that a company of such a repute not only failed to meet its planned schedule but also stopped the process midway. While the BBM app was slated to appear first on Android then on iOS, the availability of the app on iOS before Android reflected the unprofessional approach of BlackBerry.

Also the official BBM Twitter account (@BBM), whose followers swelled in number over a few hours, wasn't of much help for people waiting eagerly. It had a few jokes to share and an apology much later but didn't clear the air about what was actually causing the delay in the Android app rollout.

Finally, after more than 12 hours of BBM for Android's scheduled availability time, Inside BlackBerry, the official BlackBerry blog, had a three-paragraph post that put the blame for the delay on "an unreleased version of the BBM for Android app" that was posted online. According to BlackBerry, "more than 1.1 million active users in the first 8 hours without even launching the official Android app." But the user eagerness in getting BBM on their non-BlackBerry phones led apparently led to some issues. "Consequently, this unreleased version caused issues, which we have attempted to address throughout the day," the post by BlackBerry's Business Social Media Manager Luke Reimer said. As a result the unreleased Android app will be disabled and BlackBerry has stopped, for now, the global roll-out of BBM for Android and iPhone.

Those who have downloaded the BBM for iPhone from the Apple App Store, will be able to continue to use BBM.

BBM has more than 60 million monthly active customers on BlackBerry alone and this figure is expected to multiply with the popular messaging app becoming available on the two most popular mobile platforms.

BlackBerry 10 sales weak

Waterloo, Ontario-based BlackBerry, once Canada's premier technology company, said it expects to book a $930 million to $960 million writedown in its fiscal second quarter owing to a ballooning stockpile of unsold BlackBerry Z10 devices.

The company had bet much of its future on the popularity of the Z10 touchscreen device - the first of the smartphones to be powered by its new BlackBerry 10 operating system. While the device drew favorable reviews, it has failed to gain traction among consumers since its introduction earlier this year. For the second quarter, the company expects to have sold about 3.7 million BlackBerry smartphones to end users.

BlackBerry said it is changing the way it accounts for device sales, now booking revenue only after a device is sold to the end customer, and not to carriers. Worryingly, most of the unit sales being recognised in the quarter are older-generation BlackBerry 7 devices.

The company said it could not recognise BlackBerry 10 devices shipped in the quarter until those devices are sold through to end customers. That suggests carriers have been having difficulty moving the new line of devices.

Major job cuts

BlackBerry said it expects its adjusted net loss, before giving effect to the inventory and restructuring provisions, will be in a range of about $250 million to $265 million, or a loss of 47 cents to 51 cents a share. BlackBerry sees about $1.6 billion of revenue in the second quarter, of which roughly 50 per cent is expected to be revenue from its services unit.

Analysts, on average, had forecast a loss of 15 cents a share on revenue of $3.06 billion, according to Thomson Reuters. "The revenue and device shipment numbers are pretty surprising given how weak it is," said UBS analyst Passi. "I think many of us were expecting a pretty difficult quarter, but this is much worse than we anticipated."

The company, which had warned that job cuts were in the offing, plans to shed 4,500 jobs. BlackBerry has already undergone a major round of job cuts over the last 12 months. It employed 12,700 people as of March, and once had close to 20,000 employees. BlackBerry said its cash position as of the end of the fiscal second quarter is estimated to be about $2.6 billion, down from about $3.1 billion three months earlier.

"It makes it even more difficult for somebody to step in and buy the company. If you look at what's been happening, they've burnt through approximately half a billion dollars in cash in the last three months," said Veritas Investment Research analyst Neeraj Monga.

First Published: September 22, 2013, 3:30 PM IST
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