BlackBerry to swallow $1 billion writedown on unsold devices

The hope that the BlackBerry 10 operating system would be the ray of light to clear up the dreary outlook for Waterloo, Ont. based BlackBerry Ltd. Is becoming dimmer as the bad news starts to pile up.

News from Bloomberg that BlackBerry will be forced to take a $1 billion write down on unsold inventory is confirmation sales of its new handsets just aren’t selling as well as hoped. While BlackBerry 10 got a warm reception in its home country of Canada at launch, it hasn’t resonated with other key and larger markets such as the U.S.

South of the border, BlackBerry 10 units went on sale months after release in the U.K. and Canada, and carriers were less enthusiastic about marketing yet another new mobile platform. BlackBerry 10 was sold almost as an afterthought, with focus on featuring the latest premium Android smartphone or the always popular iPhone.

News of the writedown comes on the heels of BlackBerry unceremoniously launching it’s new Z30 smartphone. With the largest screen on a BlackBerry yet and a faster processor, it becomes the flagship device for BlackBerry 10. But without the hardware might of the new iPhone 5s (on sale today) or the countless bells and whistles crammed in Samsung’s Galaxy S4, it’s hard to argue that BlackBerry is once again being outpaced by its competition.

Taking a $1 billion hit to its bottom line makes it seem more likely BlackBerry will lay off 40 per cent of its staff, as reported by the Wall Street Journal – though BlackBerry didn’t confirm that report, it also didn’t completely refute it. Slashing staff would also make the firm easier to swallow as it actively looks for a buyer.

Ironically the surge in BlackBerry’s stock since April may be hindering it now as it seeks acquisition. Prospective buyers are likely to feel the company is overpriced compared to its outlook.

Brian Jackson
Brian Jackson
Editorial director of IT World Canada. Covering technology as it applies to business users. Multiple COPA award winner and now judge. Paddles a canoe as much as possible.

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