Telecom Lead America: BlackBerry has posted 36 percent decrease in revenue for fourth quarter of fiscal 2013 to $2.7 billion against $4.2 billion in the same quarter of fiscal 2012.
The revenue breakdown for the quarter was approximately 61 percent for hardware, 36 percent for service and 3 percent for software and other revenue.
BlackBerry’s Q4 net income from operations was $94 million against net loss of $118 million in the same quarter of fiscal 2012.
During Q4, BlackBerry shipped approximately 6 million BlackBerry smartphones and approximately 370,000 BlackBerry PlayBook tablets.
Samsung shipped 63.7 million smartphones in Q4, while Apple shipped 47.8 million smartphones.
BlackBerry — announcing the financial results today — said it shipped 1 million BlackBerry 10 devices, but it lost 3 million subscribers.
Jan Dawson, chief telecoms analyst at Ovum, said: “The one million devices sold is a sign that BlackBerry achieved decent if not stellar traction in the quarter for its new devices.”
BlackBerry’s revenue for the fiscal year ended March 2, 2013 was $11.1 billion, down 40 percent from $18.4 billion in fiscal 2012.
The company has posted net loss of $628 million in fiscal 2013 against net income $1.2 billion in fiscal 2012.
Thorsten Heins, president and CEO, said: “We implemented changes at BlackBerry over the past year and those changes have resulted in the Company returning to profitability in the fourth quarter.”
What is ahead for BlackBerry?
BlackBerry will increase its marketing investment in the first quarter of fiscal 2014 to support the launch of BlackBerry 10. The smartphone major will increase marketing spend by 50 percent sequentially.
The company will approach breakeven financial results in the first quarter based on its lower cost base, more efficient supply chain, and improved hardware margins.
Anticipation of the launch of BlackBerry 10 likely depressed demand for BlackBerry devices throughout the quarter in markets where the device hadn’t launched yet.
“The loss of three million subscribers is a worrying sign. BlackBerry’s single biggest asset has been its large existing subscriber base, who are the most likely buyers of BlackBerry 10 devices, and the acceleration in the decline of that base reduces the size of the addressable market for BlackBerry 10,” Ovum analyst Dawson added.
As a result, BlackBerry’s tight grip on enterprise users has loosened and its popularity within emerging markets has been diminished by the competition.
Now that BlackBerry has unveiled BB10, the company is faced with migrating current BlackBerry users to upgrade while persuading smartphone users of other platforms, including previous BlackBerry users, to switch.
In December 2012, IDC said that the BlackBerry OS will grow slowly but largely maintain share over the coming years following the BlackBerry 10 launch next year.
The new operating system and devices will be valued by some longtime BlackBerry fans, particularly those who have waited for the new OS as BlackBerry delayed its release.
Earlier, IDC said this will allow the company to maintain pockets of strength in higher-growth emerging markets such as Indonesia and various Latin American countries. But, as with many other new platforms, the success of BB 10 will be partly dependent upon channel advocacy, like sales associates who can effectively tell the BlackBerry story.
BlackBerry’s emerging markets strategy is no longer enough to offset the rapid decline in mature markets, and it’s unlikely that the company can reverse this trend long-term.
As shipments have fallen, service revenues have become much more important, growing from 15 percent to 36 percent of BlackBerry’s overall revenues over the past few years. The loss in subscribers means declining service revenues, which will put further pressure on margins, which have dropped in recent years too.
