BlackBerry's crash to earth not a surprise for some

Day long predicted

BlackBerry crashed to earth Friday afternoon as sales losses from their phones were too pitifully weak to help regain the company any of its past glory.

As news leaked out that the Waterloo, Ont.-based maker of the once-ubiquitous BlackBerry would report a Q2 loss of up to US$950 million some in the industry said they believed this day was long coming. The company announced it would lay off 4,500 employees worldwide.

“It’s not too surprising—we’ve had a sell rating on the stock because of the weakness,” said Brian Modoff, Senior Communications Technology Analyst Deutsche Bank Securities.

“All of our surveys have really pulled out a lack of traction for BB10 as a technology, and as a result of that we’ve been negative on the stock with a sell rating.”

Modoff pointed out that smartphones have evolved by leaps and bounds since the launch of the iPhone and BlackBerry has certainly not kept up.

“It’s not surprising that they’re having a hard time selling these products–it’s the biggest issue they have, is the app development when the development community isn’t supporting it,” Modoff said.

“We’re a BYOD world now, we’re not a world where they dictate the terms to you like they used to, when BlackBerrys originally came out. So their trying to shift to a strategy that in our view isn’t really tenable,”

New CEO Thorsten Heins had thought to change the direction of the company in several ways, one of which was to gear the technology to phone-makers and leave the consumer side entirely—but Modoff believes BlackBerry has come too late to that strategy.

“Are there groups that might still have an interest in [enterprise?] Could governments possibly? It’s just not a big group.”

As for BlackBerry going private or selling themselves now, the question is who would buy the company other than to retain its patents.

“That’s the other issue—someone has to have a need for them, like Google did with Motorola. They bought the whole company because they wanted their patents, said Modoff.

In the end, the fate of Blackberry was probably sealed when Apple began to have success with its smartphone and all other manufacturers jumped into the market.

“I wish them all the luck, because you don’t like seeing what they’re having to do… the layoffs,” said Modoff. “But the thing about consumer electronics technology, is it’s a hard place to compete in, and when you fall behind it’s very hard to catch up.”