Critical Analysis Blackberry 1 
Critical Analysis Paper #1
2/24/2014
Blackberry is facing company-wide issues proven by disappointing financial performances posted by the Wall Street Journal. Blackberry’s financial reports included revenues dropping by 45% in fiscal second quarter, $1.57 billon down from $2.86 billion a year ago (Connors, 2013). Blackberry posted a profit loss of $965 million this quarter, up from a loss of $235 million a year ago (Connors, 2013). Blackberry’s cash flow was $2.6 billion at end of the quarter, down from $3.1 billion from last quarter (Connors, 2013). These poor performance figures will be examined by a situation analysis of internal and external factors that are leading to Blackberry’s decline.
Performance problem: Revenues
External market size and growth has been a root cause of Blackberry’s revenue problems. Blackberry’s global market share declined to 5% in 2012 from 20% in 2009 (Palenchar, 2013). Blackberry lost four million subscribers in the last quarter, bringing total subscribers to 72 million (Connors, 2013). This happened primarily because Blackberry is falling to woo customers with its products. For example, Blackberry introduced the new Z10 smartphone, but instead of selling satisfying numbers of the new Z10 smartphones, Blackberry sold 3.7 million of its old cellphone inventories. The cost of producing the Z10 is not covered with the revenue Blackberry is producing. Another factor is the lack of innovation at Blackberry (Hessman, 2013). Blackberry is losing revenue because it cannot keep pace with innovators and competitors such as Apple, Google, and Samsung. From the start, Blackberry had trouble adjusting to market (Hessman, 2013). When Apple introduced the iPhone in 2007, Blackberry knew that Apple’s new phone is innovating, but Blackberry failed to change itself to adjust to the market accordingly. Blackberry was not willing to take risk and today it faces the same problem. Since there is no innovation at Blackberry, customers
2/24/2014
Blackberry is facing company-wide issues proven by disappointing financial performances posted by the Wall Street Journal. Blackberry’s financial reports included revenues dropping by 45% in fiscal second quarter, $1.57 billon down from $2.86 billion a year ago (Connors, 2013). Blackberry posted a profit loss of $965 million this quarter, up from a loss of $235 million a year ago (Connors, 2013). Blackberry’s cash flow was $2.6 billion at end of the quarter, down from $3.1 billion from last quarter (Connors, 2013). These poor performance figures will be examined by a situation analysis of internal and external factors that are leading to Blackberry’s decline.
Performance problem: Revenues
External market size and growth has been a root cause of Blackberry’s revenue problems. Blackberry’s global market share declined to 5% in 2012 from 20% in 2009 (Palenchar, 2013). Blackberry lost four million subscribers in the last quarter, bringing total subscribers to 72 million (Connors, 2013). This happened primarily because Blackberry is falling to woo customers with its products. For example, Blackberry introduced the new Z10 smartphone, but instead of selling satisfying numbers of the new Z10 smartphones, Blackberry sold 3.7 million of its old cellphone inventories. The cost of producing the Z10 is not covered with the revenue Blackberry is producing. Another factor is the lack of innovation at Blackberry (Hessman, 2013). Blackberry is losing revenue because it cannot keep pace with innovators and competitors such as Apple, Google, and Samsung. From the start, Blackberry had trouble adjusting to market (Hessman, 2013). When Apple introduced the iPhone in 2007, Blackberry knew that Apple’s new phone is innovating, but Blackberry failed to change itself to adjust to the market accordingly. Blackberry was not willing to take risk and today it faces the same problem. Since there is no innovation at Blackberry, customers
References: Austen, I. (2013, September 27). Blackberry’s Future in Doubt, Keyboard Lovers Bemoan Their Own. Retrieved from http://www.nytimes.com/2013/09/28/technology/blackberry-loses-nearly-1-billion-in-quarter.html?_r=0 Connors, W. (2013, September 27). Blackberry Posts Loss as Phones Go Unsold. Retrieved from http://online.wsj.com/news/articles/SB10001424052702303342104579100852362386852 Hessman, T. (2013, September 2). Innovation: Blackberry 's Long Fall from the Top. Retrieved from http://www.industryweek.com/innovation/innovation-blackberrys-long-fall-top Ottawa & San Francisco. (2013, September 28). Still in a Jam. Retrieved from http://www.economist.com/news/business/21586869-going-private-will-not-solve-companys-problems-still-jam Palenchar, J. (2013, February 11). Blackberry Facing Tough Battle. Retrieved from http://www.twice.com/node/104958/view