REFILE-UPDATE 1-BlackBerry move away from consumers unlikely to stem decline

Mon Sep 23, 2013 8:37am EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Alastair Sharp

TORONTO, Sept 23 (Reuters) - BlackBerry Ltd's plan to retreat from the consumer market in favor of its traditional strength serving businesses and governments is widely seen as a desperate move that industry watchers warn will only accelerate its downward spiral.

The strategic shift and dramatic restructuring are fueling fears about BlackBerry's long-term viability. The uncertainty created could easily push more of its telecom partners, business customers and consumers to abandon the platform.

"Perception is nine tenths of reality and if customer and supplier confidence continues to fall it doesn't matter how much cash they have on the balance sheet. Things could get worse," said GMP Securities analyst Deepak Kaushal.

At least nine brokerages slashed their price targets on the company's stock, to as low as $5. BlackBerry's shares, which fell 17 percent on the Nasdaq on Friday, fell another 5.6 percent to $8.23 before the bell on Monday.

The Canadian smartphone maker, once the leader in wireless email, announced the change in focus on Friday afternoon when it also said it will report a quarterly loss of close to $1 billion and slash more than a third of its workforce.

"We have been steadfast in our position that BlackBerry should downsize and focus on the enterprise, a strategy the company will now pursue. Our view now is that any recovery is very unlikely," National Bank Financial analysts wrote in a research note, cutting their share price target to $5 from $8.

  Continued...