BlackBerry will pull back from consumer market, warns of huge loss and layoffs

Bye bye BlackBerry as we know it

BlackBerry released its preliminary second quarter financial results today, and as jargon-y as that sounds, the company dropped a few big bombshells.

We'll start with the news that will affect consumers directly: BlackBerry has decided to shift its future smartphone portfolio from six devices to four. Cost saving measures are to be expected, but there's more.

The phone maker will now focus on making "enterprise and prosumer-centric targeted devices," producing for that space two high-end devices and two entry-level devices. All-touch and QWERTY models are in the offing, but the days of BlackBerry plying phones ardently to consumers are over.

What's more, following the announcement of the BlackBerry Z30, BlackBerry will re-tier its predecessor, the disappointing Z10, making it available to "a broader, entry-level audience."

BlackBerry reiterated a special committee continues to explore strategic alternatives for the company's future, which it has stated include an all-out sale.

Money pit

Of course, BlackBerry wouldn't just up and decide to shift its attention to the enterprise space. It would have to be losing bucket loads of money. And it is.

According to the company's preliminary calculations, it expects a net operating loss of approx. $950 million to $995 million.

A huge portion of that - $930 million to $960 million - is a primarily non-cash, pre-tax inventory charge "resulting from the increasingly competitive business environment impacting BlackBerry smartphone volumes."

A pre-tax restructuring charge of $72 million is factored in there as well.

Cutting even deeper to the quick, BlackBerry's restructuring will result in the lay off of approx. 4,500 employees.

As for whatever positives there are, BlackBerry expects to pull in second quarter revenue of approx. $1.6 billion and sales of 3.7 million smartphones. It plans to chop its operating expenditures by about 50% by the end of the first 2015 fiscal quarter.

Source : http://www.techradar.com/news/phone-and-communications/mobile-phones/blackberry-to-pull-back-from-consumer-market-1182808

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