At least until we flog the company, that is
A decision by BlackBerry to publish an open letter reassuring customers about its financial health has fuelled speculation that sales of its BlackBerry 10 devices are still in decline. Tepid demand for its new flagship models such as the Z10 led to a 45 per cent revenue slump last quarter, prompting a near $1 billion inventory write-down, together with the announcement of a strategic review. But it’s thought the worst has yet to come with BlackBerry seemingly desperate to convince customers about the “advantages” of its technology, such as its Querty keyboards, security features, mobile management tools and the BBM messaging service.
In its open letter the troubled Canadian manufacturer also points out that it still has plenty of cash in hand and is debt free, with the current restructuring aimed at slashing costs by half.
The letter – due to be published in more than 30 daily newspapers today (15th October 2013) – adds, “These are no doubt challenging times for us and we don’t underestimate the situation or ignore the challenges. We are making the difficult changes necessary to strengthen BlackBerry.”
What it doesn’t allude to, however, is how its cash reserves are fast depleting largely due to a delayed roll-out of its BB10 platform and phones.
But, interestingly, it does reveal that some six million have pre-registered to use BBM on their Android and iPhone devices as and when it becomes available.
Meanwhile, BlackBerry’s board has just a few weeks to go before it needs to decide on whether to go with the $4.7 billion buyout offer worth $9 a share from a consortium led by Prem Watsa’s Fairfax Financial.
Others are also said to be circling, including the company’s co-founders Mike Lazaridis and Douglas Fregin who together have about 16 per cent of the company’s stock.
*Footnote: Vodafone’s €7.7 billion (£6.5 billion) acquisition of Germany’s Kabel Deutschland was formally sealed yesterday (14th October 2013), after a requisite three quarters of shareholders voted to accept the UK operator’s offer of €87 a share. It means Vodafone now has 76.57 per cent of Kabel’s share capital, paving the way for a push into Europe’s so-called quad play services offering television, broadband, mobile and fixed-line in a single package.