Blackberry way sees fruits from the Core

Posted by a staff writer

Blackberry lost two percent of revenue in its fourth quarter of fiscal 2013, down $49 million, and a massive 36 percent drop from $4.2 billion year on year. However, it forecasts breaking even for the next quarter and a mobile analyst has told us the company should be financially viable for some time to come.

For the quarter, hardware accounted for 61 percent of the revenue, 36 percent for service and three percent for software and other revenue. It shipped six million Blackberry smartphones and roughly 370,000 Playbook tablets.

One half of the two-headed dragon that founded and used to run the company, Mike Lazaridis, will be leaving the company.

For its outlook, Blackberry said it will be increasing marketing spend for Q1 of fiscal 2014 to support Blackberry 10. This is a planned 50 percent increase in marketing, and the firm thinks it will be near breaking even, citing lower cost base, a more efficient supply chain and better hardware margins.

Jim Dawson, analyst at Ovum, told TG Daily that every other company that's suffered a severe drop in device revenues has struggled because cust cotting at a rapid rate is difficult. "Blackberry appears to have done a great job executing on its CORE strategy which includes reducing costs, and has managed to bring costs down significantly," Dawson said. "As such, it was profitable this past quarter and should break even next quarter".

"Given its good cash balance and lack of debt, it should be financially viable for quite some time at this rate, so I'm not overly concerned about the drop in revenues," Dawson said. "I'm more concerned about the drop in subscribers, which is a longer-term indicator that it's losing customers faster than it can win new ones".