BlackBerry: This Isn’t the Android You’re Looking For
operating system.
BlackBerry’s software
business is growing, but
slumping handset sales still
matter
F
or BlackBerry, making an
Android phone was never so
much about having a great option
as much as it was about having a
least bad one. A worse option may
have been to close down a moneylosing handset business that had
no conceivable buyers, and which
has ceded most of its market share
but still accounts for more than
40% of the company’s revenue. So
BlackBerry made a bit of a gamble,
launching a smartphone last month
that, for the first time in Blackberry
history, runs on another company’s
That phone doesn’t appear to be
breaking any records. BlackBerry’s
fiscal third-quarter results included
less than a month of sales for the
new Android handset, known as
Priv. But total device sales for the
quarter were only 700,000 units,
down 65% year over year and
a record low for the company.
BlackBerry declined to detail how
many units the Priv sold.
BlackBerry prefers not to dwell
on handsets, given that it has
spent the past two years in a mad
scramble to become a software
business. And that effort is
progressing. The company reported
$154 million in software and service
revenue for the third quarter. That
is triple the level reported this time
last year and puts the company’s
$500 million target for the fiscal
year within reach. This gave a nice
boost to BlackBerry’s share price,
which had slumped about 30% for
the year prior to the results.
Still, the company’s hardware
business remains a quandary.
BlackBerry has sold about 2.6
million devices in the first nine
months of the current fiscal year.
That means it is well below the
pace it needs to hit the 5 millionper-year mark that the company
would consider “sustainable”
for the business. Whether it can
ever reach that point is an open
question. But for BlackBerry these
days, it’s all about having options
and buying itself time to let the
software business grow.
That’s not a lot for investors
to hang on to, but it beats the
alternative.
FARMERS GAZETTE
November 2015
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