Based on its just-announced fourth quarter results, things aren't looking as bad for BlackBerrry as some feared. Although BlackBerry lost 3 million subscribers, it shipped a fairly healthy 1 million BlackBerry 10 phones -- the Z10 -- out of a total of 6 million handsets overall. Perhaps most important for the company's prospects, CEO Thorsten Heins said the company returned to profitability in Q4 and that 55 percent of Z10 buyers are coming from other platforms.
BlackBerry announced $2.7 billion in revenue for the fourth quarter, down just $49 million from the previous quarter but 36 percent less than the same quarter last year. The smartphone maker reported a profit of $98 million, or 19 cents a share, compared with a year-ago loss of $125 million, or 24 cents a share. All eyes are on BlackBerry's new lineup as the former smartphone leader tries to turn a corner and snag the No. 3 spot.
"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," said Heins in a company press release. He went on to say that BlackBerry 10 is "the most innovative mobile computing platform on the market today. Customers love the device in the user experience, and our teams and partners are now focused on getting those into the hands of BlackBerry consumer and enterprise customers."
The BlackBerry Z10, which we've reviewed for AT&T and T-Mobile, certainly offers smartphone shoppers some perks versus other platforms. You can multitask with ease using the new Flow interface, and check your messages and social updates at any time in the BlackBerry Hub. We also like the flick typing experience on the new BlackBerry 10 keyboard. But that doesn't mean BlackBerry doesn't have a tough road ahead.
Although BlackBerry recently surpassed 100,000 apps, the company has admitted that a good 20 percent are ported over from Android. That means that at least for those apps you don't enjoy the deeper integration with BlackBerry 10. BlackBerry World is also missing some key apps despite the early push. You won't find Instagram, Netflix or Pandora, for example.
Another obstacle for BlackBerry is that the Samsung Galaxy S4 is on the way to the market, which offers a bigger display, a faster quad-core processor and so many innovative features it's almost scary. Then again, BlackBerry does have another smartphone waiting in the wings with the BlackBerry Q10, whose physical keyboard will give the company a one-two punch heading into the summer.
It will be up to BlackBerry to convince not only its core audience but all smartphone buyers that its platform is compelling enough. And the company hopes to get the word out for both its Z10 and Q10 by increasing its marketing spending by 50 percent.