Profile: Jeremy Gilley

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Blackberry insists BB10 activity will pay despite sales fall

Blackberry has insisted its biggest ever marketing campaign to support the launch of its BB10 operating system will pay dividends despite sales dropping 36 per cent in the fourth quarter.

BB10-Product-2013

Phone manufacturer’s rebrand helps drive one million BB10 sales but annual revenue plummets by more than a third.

The smartphone maker posted a 2 per cent fall in sales quarter on quarter in the three months to 2 March and a 36 per cent fall compared with the same quarter in 2012. For its full financial year the struggling handset maker reported a 40 per cent year on year fall in sales to $11.1bn (£7.3bn). It did, however, see profit rise to $98m (£82.9m) profit in the three months to 2 March from a loss of $125m a year ago.

Despite the sales declines, the company shipped almost one million BB10 devices during this period as it increased marketing spend by 50 per cent to support the launch of the new range and its rebrand from RIM to Blackberry. BB10 launched in January followed soon after by what the company described as its biggest ever campaign.

Blackberry says it does not expect to see an impact on sales until later in the year.

Thorsten Heins, president and chief executive at Blackberry, says the company will further increase the marketing investment for BB10 this year to drive cut through.

The business has outlined a strategy to “be more open” in its brand building activity adopting a strategy to base its advertising and digital activity around real-time feedback and analytics. It is hoped the move will spur the BB10 operating system to rival Apple’s IOS and Google’s Android platforms, although Blackberry’s subscriber base shrank to 76 million from 79 million in its third quarter.

Heins adds: “We have implemented numerous changes at BlackBerry over the past year and those changes have resulted in the company returning to profitability in the fourth quarter.

“As we go into our new fiscal year, we are excited with the opportunities for the BlackBerry 10 platform, and the commitments we are seeing from our global developers and partners. We are also excited about the new, dynamic culture at BlackBerry, where we are laser-focused on continuing to drive efficiency and improve the company’s profitability while driving innovation.”

Readers' comments (1)

  • Superb device. Can't wait for the Q10 since I like a physical keyboard. Costs under control and margins improving. Playbook sales up sharply in the quarter. Blackberry has turned the corner. I see a lot of Z10's in use here in Canada, and the buzz is exciting.

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