BlackBerry's move away from the consumer market to refocus on enterprise users will not work and will instead accelerate the company's decline, industry analysts warn.
The Canadian company announced its upcoming quarterly results ahead of schedule last week, revealing an operating loss of almost $1 billion (£624 million) and plans to layoff 4,500 employees - 40% of its workforce. The news sent BlackBerry's share price down 17% to close at $8.73.
GMP Securities analyst Deepak Kaushal told Reuters that falling confidence in the company will see BlackBerry's position worsen. "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."
Much of the company's billion-dollar loss came from a write-down of Z10 stock, the smartphone BlackBerry launched in January and hoped would take the fight back to Apple and Samsung after years of decline.
Despite offering reasonable hardware and good software with an excellent virtual keyboard, the Z10 failed to sell, sparking discounts and falling supplier and network confidence in future products.
Just days before the bad news was announced, BlackBerry revealed the Z30, a large 5in smartphone intended to draw consumers away from the Samsung Galaxy Note 3 and other so-called 'phablet' devices which fall somewhere between a large phone and small tablet.
But poor sales of the Z10 made it difficult to get carriers to commit to the Z30, a source inside BlackBerry told Reuters.
An unnamed former BlackBerry executive who used to negotiate with mobile networks also said: "Many carriers will now pull much if not all of the BlackBerrys from the shelves because shelf space is valuable and coveted and there are many other handset vendors who would eagerly invest a lot to displace BlackBerry."
Speaking after the layoffs were announced, CEO Thorsten Heins said: "Going forward, we plan to refocus our offering on our end-to-end solution of hardware, software and services for enterprises and the productive, professional end user. This puts us squarely on target with the customers that helped build BlackBerry into the leading brand today for enterprise security, manageability and reliability."
In August BlackBerry announced it was up for sale, and would entertain offers to buy some or all of the company.
Morningstar analyst Brian Colello said BlackBerry is likely looking for a quick sale - some reports claim a deal could be struck by November - but the substantial loss and job cuts meant he was no longer confident that a buyer could turn the company around.
"We see no hope for BlackBerry at this point," Colello said in a note to clients, adding that he considered the company to be in "a death spiral."