Blackberry is in trouble…

The negatives have been more than the positives for the Canadian smartphone maker in recent times and it seems the negatives are increasing daily and with threatening details as 4,500 people will lose their jobs while Blackberry lost $1 billion in the second quarter.

Blackberry has confirmed that it will lay off 4,500 members of its staff in the nearest future to reduce expenditure by about 50%. This number is about 40% of the total number of Blackberry staffs.

“We are implementing the difficult, but necessary operational changes announced today to address our position in a maturing and more competitive industry, and to drive the company toward profitability.” Blackberry CEO Thorsten Heins said in a statement.

It also announced a week earlier that its losses for the second quarter could be around $950 million to $995 million. Blackberry has announced sales revenue of $1.6 billion for the same quarter. While this is a massive amount to consumers, it is an abysmal amount for Blackberry.

This amount is about half of the $3 billion that Wall Street analysts predicted for the troubled Canadian company. Sales also fell to 3.7 million units of smartphones, down from 6.8 million in the first quarter.

Blackberry launched its new OS Blackberry 10 in January with the hope of resurgence in the fierce smartphone market. It also launched the Blackberry Z10 and Q10 smartphones with the hopes that this may change its fortunes.

Unfortunately, these two products have done little to affect Blackberry’s smartphone market share positively. Even the newly announced Blackberry Z30 has not generated half of the buzz generated by the new iPhones which analysts claim will sell 5 million units this weekend.

This sale figure by Blackberry is the lowest since 2007 when the first iPhone was launched. Few people would have thought Blackberry could be in a mess as big as this. In 2009, Blackberry had 51 percent of the North American smartphone market according to Gartner. Now, Blackberry has about 3% in the same market.

Blackberry was once Canada’s most valuable company with a market value of $83bn in June 2008 compared to $4.5bn now. Blackberry’s shares hit a 17% low as it plunged to $8.01 at the announcement before closing at $8.72.

“The company has sailed off a cliff. What do you expect when you announce you’re up for sale? Who wants to commit to a platform that could possibly be shut down?” Colin Gillis, an analyst at BGC Partners commented.

One way I do think Blackberry can have a chance is if it reduce prices of some of its devices. All things being equal, very few will buy a Blackberry device when it is more expensive than a better Samsung galaxy S4.

Posted in Blackberry, Smartphones