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Blackberry shares fall 28% after unexpected loss

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Blackberry shares have plummeted drastically after the company announced a loss of $84m (£55m) for the three months to 1 June. Despite the fact that this was a vast improvement on the same period last year which saw a $518m loss, it was a substantially worse performance than analysts had expected. With the Canadian based company suggesting an operating loss would be inevitable in the next quarter as well, Blackberry shares closed down 28% in New York with nearly a third of the company’s value being wiped out.

As the company which recently changed its name from RIM – Research in Motion to the name of its best known handset, Blackberry rolled out their new BB10 platform, chief executive Thorstein Heins continued to sound confident.

"We are still in the early stages of this launch, but already, the Blackberry 10 platform and Blackberry Enterprise Service 10 are proving themselves to customers to be very secure, flexible and dynamic mobile computing solutions,"

Anyone who uses the word ‘solutions’ may be judged to be papering over the cracks, and despite the fact that revenue had increased from last year, analysts took a very dim view of the company’s health.

They had been looking at these figures to judge the success of the touchscreen Z10 device and the Q10, which kept the traditional mini keyboard Blackberry became well known for.

"It doesn't bode well for the initial Blackberry 10 launch, particularly the Z10. But even the outlook for a second-quarter loss doesn't bode well for the Q10 either," said Brian Colello, an analyst with Morningstar.

With Apple’s iPhone settled in at the top of the smartphone charts and Samsung flush with the success of the Galaxy range, Blackberry are struggling to find their niche.

"They're not the high-end provider any more, they're not Apple. They're not the low-end provider, they're not Nokia. So they are in the middle and they do relatively low volumes," said Daniel Ernst from Hudson Square Research

"It's difficult to make great margins on that kind of volume, so I would say the outlook is quite negative."

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