NEW YORK ( TheStreet) -- As shares of BlackBerry (BBRY - Get Report) traded at almost $14 per share on July 5, I warned investors to brace for more losses. It was clear that although the company had made some meaningful progress toward profitability, the recurring theme of one step forward followed by two bloodbaths was still at play.
Last Friday, with the company's
of fiscal second-quarter results, due Friday, Sept. 27, things were of the "bloodbath category." But unlike previous dances, I don't believe there will be any steps forward, given the worse-than-expected state of the company. Seeing no progress from its fight against
in device sales, BlackBerry essentially said "to hell with the consumer market" and will instead turn its attention to the enterprise.
The news sent shockwaves to BlackBerry investors, many of whom have waited patiently and faithfully for the company to make good on its promise and resuscitate itself. But last week, while citing statements made by Bert Nordberg, who sits on BlackBerry's Board of Directors, it was clear that BlackBerry had no interest in prolonging the agony. In a conversation with
The Wall Street Journal
, Nordberg said:
"I think BlackBerry is able to survive as a niche company. But being a niche company means deciding to be a niche company. Historically, BlackBerry has had larger ambitions. But battling giants like Apple, Google and Samsung (SSNLF) is tough."
Looking back, it was obvious Nordberg was hinting at what was made official last Friday. We just didn't know to what extent. BlackBerry, or "the niche company," has now created the word "prosumers" to describe its target market. With no official definition of the term, we can safely assume it means "professional consumers," which is another way to describe the corporate enterprise.
Now, given that BlackBerry lost roughly $1 per share in cash during the quarter by going after a market that it can't win, I can't blame management for coming to terms with its situation. Further, management justified the decision by reminding investors that it was in the enterprise that the company had originally made its name.
While, this might be true, BlackBerry doesn't appear to realize that the enterprise has changed. And they don't want anything to do with BlackBerry. Weak phone sales mean weak adoption. And CIOs, or chief information officers, who once looked for ways to diversify into other operating systems no longer have a reason to include BlackBerry. As much as they would have liked, their employees -- by virtue of their spending -- have shown no interest in the new BlackBerry 10 phones.