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Charles Arthur 

With the fall of Nokia looming over him, this weekend will be an uncomfortable one for Thorsten Heins, chief executive of BlackBerry. While the Finnish firm sold its mobile phone business to Microsoft for €5.4bn (£4.5bn) this month, questions are swirling as to how long BlackBerry – which signalled its distress in August by putting itself up for sale – can survive, and in what form.

Things are so bad that on Friday night, market rumours forced Heins to announce the top-line quarterly results a week early. And they are grim: an operating loss of up to $995m (£620m), including $960m of inventory writedowns on its new Z10 handsets released in January, a net loss of more than $250m, revenues half what analysts expected at $1.6bn, and phone shipments of 3.7m – which Apple will comfortably exceed with its new iPhones this weekend alone.

For a company that once dismissed the iPhone for having no keyboard (a key selling point for BlackBerry phones), it's a humiliation. The low shipment figure exposes Heins's claim in April that the new Q10 phone – the first keyboard-equipped model using its new BB10 software – would sell "tens of millions". It might have sold a million.

Now the question is turning to how long BlackBerry has to go. On Friday, the company said it will cut 4,500 jobs, roughly 40% of its 11,000 total worldwide, adding to 7,000 jobs cut in the two previous financial years. It will reduce its future phone portfolio from six to four.

One former insider asks: "How would BlackBerry win? There's no answer to that at the moment. A buyer? I don't see how they would make the case."

This weekend was meant to be a new start for the company, with an attempt to turn back the clock to when it was the star of the tech world by offering its famous BlackBerry Messenger (BBM) software free for iPhones and Android phones. But rivals such as WhatsApp are already on both, with more users, while BlackBerry's base is dwindling both among consumers and businesses. BBM's arrival on the other platforms is two years too late, says the insider.

Friday's bad news drove the stock down by 20%, to a market cap of just $4.5bn. Broken up, BlackBerry might be worth more: last quarter, it valued its patent portfolio at $3bn, and says it has $2.6bn of cash and no debt. The services business has around 35m business customers, who could fetch up to $4.5bn.

But who would buy it now? Silver Lake, the private equity company that facilitated the recent $24.8bn buyout of Dell, appears uninterested – and Michael Dell has said his company won't go back into smartphones. Reuters reported last week that while Canada's Fairfax Financial Holdings, a 10% shareholder, might try to stage a buyout, interest from other private equity players is muted.

So where did BlackBerry go wrong? Was it the PlayBook tablet, unveiled 18 months after Apple's iPad in September 2011 with the slogan "Amateur Hour Is Over"? That has devoured $750m in write-offs, but the insider says its software was essentially that used in BB10. So, costs aside, it wasn't a distraction.

Instead, Mike Lazaridis, who devised the first BlackBerrys, and Jim Balsillie, who ran the company with him, failed to grasp how quickly the change ushered in by the first iPhone in 2007 would overwhelm the smartphone industry. According to the former insider, BlackBerry underestimated the speed at which businesses would start letting staff connect their own smartphones to company servers for email and more. "BlackBerry didn't move fast enough on that, nor get BBM out soon enough," the insider says.

The key failing was that BB10 was two years too late. Lazaridis and Balsillie saw that BB7, which powers older BlackBerrys, was outdated, but the new version was not released until January this year.

Heins was installed in January 2012 after the board ejected the two founders, but he does not escape criticism either. He was the chief operating officer and so "had the reins of the smartphone business", says the insider. That means the delay in releasing BB10 can be laid in part at Heins's door.

Yet if BB10 had taken off, it would have cut the company's throat. That's because phones using that software don't generate any service revenues from sending emails, data and web pages – which amounts to between a fifth and third of revenues, and rather more of profits.

All eyes are on BlackBerry now. But the message is not a positive one. The turmoil in the smartphone industry is brutal; more casualties may follow.