Jul 01, 2013

    No respite for BlackBerry

    BLACKBERRY'S shares tumbled the most since 2000 after the company reported a surprise loss and weak sales of a new touchscreen model, underscoring the challenges it faces in competing directly with the iPhone and Android devices.

    The company shipped 6.8 million smartphones last quarter, including about 2.7 million new BlackBerry 10 models - primarily its flagship Z10 touchscreen phone.

    Analysts had estimated total shipments of 7.5 million, with about 3.6 million BlackBerry 10 units. BlackBerry is struggling to expand beyond keyboard phones, which are not as sought after as Apple's iPhone or smartphones based on Google's Android.

    The stock tumble more than wiped out its gains for the year, signalling that investors may have been too optimistic about BlackBerry's ability to make a comeback against touchscreen rivals.

    "The company is now a niche player for the declining segment that clings to a physical keyboard," said University of Michigan business professor Erik Gordon.

    BlackBerry's flagship Z10 model was introduced in Britain in late January, before being rolled out in the following weeks in Europe and the United States. The Q10, which has a physical keyboard, is meant to appeal to BlackBerry loyalists who prize the company's qwerty keypads.

    BlackBerry faces price pressures in regions such as Latin America and South Asia, where low-cost Asian manufacturers are flooding the market with devices that run on Android.

    "BlackBerry 10 is still in the early stages of its transition," chief executive Thorsten Heins told analysts in a conference call. "In fact, we are only five months into what is the launch of an entirely new mobile-computing platform."