Blackberry’s stock tumbled more than 25 percent after the smartphone maker, which is struggling to compete with Apple’s iPhone and Samsung’s Galaxy, reported an increase in smartphone sales of only 13 percent, compared with the previous quarter, despite the launch of its new line of smartphones running on the Blackberry 10 operating system.
In fact, Blackberry shipped more of its older devices than new ones, which disappointed investors. On the conference call, Blackberry said it shipped 2.72 million BB10 devices versus a little more than 4 million of its older devices. Analysts were expecting the company to sell anywhere between 2.75 and 5 million of the BB10 devices.
The company has been struggling to compete with the growth of subscribers to iPhone and Android-powered devices which have continued to gain traction. Blackberry was hoping that the launch of the Z10, which features a touch-screen instead of Blackberry’s iconic physical keyboard, and the Q10 would reinvigorate its line of devices. However, many analysts feel that its new line of smartphones came too late to catch up with the growing iPhone and Android devices.
Blackberry also said it would not be updating the company’s Playbook tablet with BB10 operating system because CEO Thorstein Heins said he was unsatisfied with the user experience. The company shipped 100,000 PlayBook tablets, down from 370,000 in the fiscal fourth quarter and 260,000 in the year-ago period. Heins said it will continue to support the PlayBook in its current configuration.
Aside from disappointing sales of BB10 devices, Blackberry also reported that subscribers fell by 4 million to 72 million total. The company also reported a first quarter loss of $84 million following two profitable quarters. Revenue grew to $3.1 billion compared with $2.7 billion last quarter, however it still missed analyst estimates of $3.3 billion.