BlackBerry Will Soon Be Profitable, Company Tells Investors
BlackBerry is one technology brand that has been in trouble. The company was unable to adapt to the changing mobile landscape and catch up to the likes of Apple and Google, who were pushing touchscreen handsets with iOS and Android, respectively. Last year showed off the company’s problems quite clearly, as during Q3 2014 it experienced its lowest quarterly figure since 2006 and its revenue was also 42% lower than Q3 2013. Not only that, but the number of BlackBerry subscribers also decreased, as did the amount of money that the company was making per subscriber. The company wasn’t completely failing then, but it clearly needed a drastic turnaround.
This year has brought such change as the company has mostly moved away from the hardware side of things, perhaps understanding that it won’t ever be an Apple-bothering juggernaut. Instead, BlackBerry has prioritized licensing its humongous patent library and has released one key flagship, the BlackBerry Priv. Running Android, the Priv offers both a touchscreen and a QWERTY keyboard, with the latter always being one of the biggest draws to BlackBerry’s handsets, and it’s also packed with security features such as private file-sharing, private conferences, and private voice calls.
This strategy appears to have paid off, as the company had much lower losses than expected in Q3 2015. Although Wall Street expected BlackBerry to suffer losses of 14 cents per share, the company instead had non-GAAP losses of $15 million which is around 3 cents per share. Moreover, the company raked in $557 million in revenue which beat forecasts of $489 million, aided by a doubling of software revenue in the company. Also worth noting that although the BlackBerry Priv sold 700,000 units, lower than the estimates of 900,000 units, the average selling price for the device jumped from $240 to $315 and BlackBerry notes that some Priv consumers have switched from Android and Apple.
As for what the future holds, Morningstar analyst Brian Colello says that “BlackBerry hit a software number that investors have been looking for them to hit for quite some time. I think the investment in security, in software, is the right move.” Meanwhile, BlackBerry’s chief executive John Chen is also predicting that the company will be profitable once more at the beginning of fiscal year 2017, which begins in March 1.
Moreover, Chen states that this quarter, the BlackBerry Priv will go on sale in 30 countries and that “we’re planning on other Android phones, but it all hinges on how we do with the Priv”. Additionally, the executive explains that “I’ve said that if we cannot make money we’re going to get out of the phone business, and I mean hardware. We have tons of software that absolutely could run, not only on Android phones, but Apple and Windows phones too. We will remain in the phone business one way or the other” and he also expressed that BlackBerry will keep forging on with this devices/licensing strategy.
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