BlackBerry managed to sell only 8,000 units of the Classic and Passport, which is nowhere “close” to what sales of the two handsets should be, stated Morgan Stanley in a report. The firm reiterated its $7 price target on the Canadian firm with an Underweight rating.
BlackBerry a hard sell to enterprise, individual customers
Both phones were launched last year through Amazon, and recently AT&T started selling them on its network. According to the research firm, a meager 8,000 units of the Classic and Passport were sold, which is far fewer than the 2 million to 3 million target that BlackBerry needs in the 2016 fiscal year. Not just to individual customers, but BlackBerry is also finding it challenging to sell its phones to enterprise customers, which have been a longtime fan of BlackBerry devices.
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According to Morgan Stanley, the Canadian company will fall short of its $500 million software revenue target to compensate for the hardware business, and the company will not be able to “get anywhere close” to this target.
Focusing on security and services
Last year the Passport was seen as a promising device as the company garnered impressive initial sales numbers. The second batch also sold quickly. Toward the end of last year, the Canadian smartphone maker launched the Classic, and in North America, the preorder inventory was sold out in December. Amazon has been selling the unlocked version without a contract since the phones were launched.
The Waterloo, Ontario-based company is in its turnaround phase, and CEO John Chen has clearly outlined that his aim is to focus on software and services rather than hardware. Just last week, the company launched the BlackBerry SecuTablet, a high-security tablet for government and enterprise customers. BlackBerry designed the tablet, teaming up with Samsung and International Business Machines. Whether or not the BlackBerry SecuTablet will drive the stock ahead has yet to be seen.
On Monday, BlackBerry stock closed down 0.92% at $9.72, while year to date, shares of the Canadian firm are down almost 12%.