BlackBerry’s middling Z10 phone cost it $934M last quarter, out of a total $965M loss

We know BlackBerry’s last quarter was a messy one for the company — enough to force it to sell to Canadian investment firm Fairfax Financial Holdings for just $$4.7 billion — but seeing all the details in its second quarter earnings report still hurts.

While BlackBerry previously said it expected a second quarter loss between $950 million and $955 million, it’s now reporting that the total loss was $965 million. The biggest contributor to that was the company’s first BlackBerry 10 smartphone, the Z10, whose unsold inventory alone accounts for $935 million in losses.

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I called the Z10 a “boring beta meant for no one” in my review, but even then I had no idea it would lead to the downfall of the company.

Overall, BlackBerry reported revenue of $1.6 billion for the quarter, down 49 percent from last year. The company says it shipped 3.7 million smartphones during the quarter, most of which were older BB 7 devices. Counting phones shipped prior to the second quarter, BlackBerry sold 5.9 million phones to customers in Q2.

Last week, BlackBerry announced that it would be laying off 4,500 workers, warned of its huge Q2 loss, and said it would be shifting away from the consumer market to prosumers and business users. That’s a move the company should have looked at years ago, after realizing it was entering the modern smartphone market far too late to make a dent against the iPhone and Android.

“We are very disappointed with our operational and financial results this quarter and have announced a series of major changes to address the competitive hardware environment and our cost structure,” said BlackBerry president and CEO Thorsten Heins in a statement today. “While our company goes through the necessary changes to create the best business model for our hardware business, we continue to see confidence from our customers through the increasing penetration of BES 10, where we now have more than 25,000 commercial and test servers installed to date, up from 19,000 in July 2013. We understand how some of the activities we are going through create uncertainty, but we remain a financially strong company with $2.6 billion in cash and no debt.”