BlackBerry Ltd. is reaching out to its dwindling customer base with a global communications campaign that seeks to assure them that the Waterloo, Ont., firm is far from dead, despite a calamitous slide in sales, heavy financial losses and a conditional agreement to sell itself at a fraction of its former value.
“These are no doubt challenging times for us and we don’t underestimate the situation or ignore the challenges,” the company says in an open letter to be published Tuesday in 30 newspapers in nine countries, including The Globe and Mail. But BlackBerry says customers “can continue to count” on the company because it has “substantial cash,” no debt and is undergoing a deep restructuring that will halve its cost base. BlackBerry’s cash and investments stood at $2.6-billion (U.S.) as of Aug. 31.
The letter is part of an effort to “lower the temperature” and highlight both the company’s viability and competitiveness, said Andrew MacLeod, BlackBerry’s regional managing director for North America, in an interview.
“We’re going through a difficult restructuring and there’s a tremendous amount of scrutiny associated with BlackBerry right now,” he said. “We wanted to get the facts of the situation out there … We have strong assets and our ability to continue to fight and compete in this space remains very strong.”
The advertising campaign comes in the wake of several setbacks for the company. The launch of phones based on its new BlackBerry 10 operating system this year has been a failure, spurring the company to write down the value of unsold devices by more than $900-million following two years of steadily declining sales. BlackBerry has has been losing institutional customers to upstart firms whose servers support rival mobile devices – which BlackBerry has only been able to do since earlier this year – and last month influential research firm Gartner Inc. advised BlackBerry’s enterprise customers to prepare contingency plans.
At least two carriers have declined to carry the company’s new Z30 phone, although one, Rogers Communications, reversed the decision following a public outcry. Several Wall Street firms have considered abandoning the company’s enterprise service, although Mr. MacLeod said some have reconsidered after he assured them of the company’s continued viability.
“It appears they could be feeling the pinch in the marketplace from people deferring either device-purchase decisions or enterprise server upgrades because they’re unsure if the company will be around,” Veritas Investment Research analyst Neeraj Monga said. “They’re trying to instil confidence that they will be. But I’m not sure from a public relations standpoint if this is the best way to go about it. I think it’s defeatist, if you have to go out and tell people how great you are.”
The advertisement is clearly aimed at the company’s traditional customers, made up of government, business and professional users who still prefer to use the signature QWERTY keyboards found on most BlackBerry devices.
“We continue to offer the best mobile typing experience – no ifs, ands or buts about it,” the ad notes, while also highlighting the company’s secure network.
But the ad also sounds a defensive tone, acknowledging the BlackBerry’s popularity has shrunk considerably.
“We know that BlackBerry is not for everyone. That’s OK,” the ad states. It further implies its remaining customers shouldn’t be concerned about being among a dwindling minority of smartphone users because they are very important people.
“You have always known that BlackBerry is different, that BlackBerry can set you apart,” the ad states. “Countless world-changing decisions have been finalized, deals closed and critical communications made via BlackBerry.”
That was certainly the case in the past: U.S. President Barack Obama famously refused to give up his BlackBerry upon taking office in early 2009. But that was close to five years ago and since then BlackBerry’s share of the smartphone market has collapsed.
Despite Mr. MacLeod’s assertion that the company wanted to share the “facts about our situation,” the ad fails to mention that BlackBerry has conditionally agreed to a takeover by its largest shareholder, Fairfax Financial Holdings, and that it has been in talks with other possible buyers who would likely only be interested in parts of the company – feeding speculation it might be broken up. That renders the final line of the letter, “You can continue to count on us,” speculative until a takeover deal is finalized.