Canada's BlackBerry has published an open letter online and in major publications around the world to try to to reassure customers that they can count on the distressed smartphone company.
The letter was released Monday on Twitter and will be published in 30 publications in nine countries on Tuesday. It acknowledges "these are no doubt challenging times for us and we don't underestimate the situation" but says "you can continue to count on BlackBerry."
The missive notes that BlackBerry has "substantial cash on hand" and is debt free. But it makes no mention of the fact that the company is for sale and could be broken up and sold in pieces – a prospect that analysts think looks increasingly likely as the 4 November deadline for a formal bid approaches.
BlackBerry announced last month that Fairfax Financial Holdings, which owns 10% of the company, signed a letter of intent that "contemplates" buying BlackBerry for $9 a share, or $4.7bn (£2.9bn). Fairfax, BlackBerry's largest shareholder, is trying to attract other investors. Meanwhile, former founder and co-chief executive Mike Lazaridis has announced his intention to try to buy the company, while the private equity company Cerberus is also said to have expressed interest.
Count on us
"You can continue to count on BlackBerry", says the letter on the site, which is signed "The BlackBerry Team". It continues: "These are no doubt challenging times for us and we don’t underestimate the situation or ignore the challenges we are facing. We are making the difficult changes necessary to strengthen BlackBerry.
"One thing we will never change is our commitment to those of you who helped build BlackBerry into the most trusted tool for the world’s business professional." It notes that it has users among governments and corporations "that simply cannot compromise on security" and which choose BlackBerry.
But the broader outlook for the company remains bleak. The stock is trading well below Fairfax's tentative offer on fears that the deal won't go through or that the final price will be lower. BlackBerry Ltd.'s US-traded shares closed up 7¢ to $8.14 Monday. At the end of September, it announced that it had had to write off $934m on unsold Z10 handsets – the touchscreen device it launched in January to spearhead its attempt at a comeback.
Instead, the BB10 devices have sold slowly, selling a few million in total rather than the "hundreds of millions" that chief executive Thorsten Heins had hoped to see for the keyboard-based Q10 device alone.
The company now says it intends to focus on core markets. "Yes, there is a lot of competition out there and we know that BlackBerry is not for everyone. That’s OK," it says in the open letter.
But the problem for BlackBerry is that users are not upgrading from the older BB7 handsets to the newer BB10 ones. Consumers seem to be jumping ship to iPhones or Android phones, while a number of businesses have held back from upgrading because the BB10 phones cannot be used with the older BB7 server software used to encrypt and send email to corporate customers – but the newer BB10 servers which are compatible with the BB10 handsets do not work with the older BB7 handsets.
That has led businesses either to stockpile BB7 handsets, or abandon the platform altogether.
"We're getting a lot of queries and interest from loyal consumers, from all of our enterprise customers and big government institutions," Andrew MacLeod, BlackBerry's regional managing director for North America, said in an interview with Associated Press. MacLeod said it's important to communicate with customers while the company goes through a difficult restructuring. He declined to comment on the sale process because a special committee of board members is examining that.
The BlackBerry, introduced in 1999, was once the dominant smartphone for on-the-go business people and other consumers. But the advent of a new generation of competing touchscreen smartphones, starting with Apple's iPhone in 2007, made the BlackBerry look ancient. The company's sales and market share shrank and it lost billions in market value.
This year's much-delayed launch of BlackBerry 10 system and fancier devices that use the software was supposed to rejuvenate the brand and lure customers. It did not work. The Ontario-based company recently announced 4,500 layoffs, or 40% of its global workforce, and reported a quarterly loss of nearly $1bn.
"Candidly, we haven't seen the level of the traction in certain markets that we had hoped," MacLeod said. "It takes time for new platforms to get traction and we think we need to give BlackBerry 10 more time in the marketplace in order to get to the level of volume that we had hoped."
The letter says BlackBerry continues "to offer the best mobile typing experience no ifs, ands or buts about it."
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image: © Kristian D