BlackBerry Ltd CEO Sets A Deadline For Handset Business

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BlackBerry Ltd CEO Sets A Deadline For Handset Business
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BlackBerry recently released its quarterly results revealing that in three months, the company sold 600,000 smartphones; however, it did not indicate how its flagship Android-powered device, the Priv, sold. BlackBerry CEO John Chen made it clear that if the trend of dwindling smartphone sales continues, the company will shut down this division and focus entirely on security and enterprise.

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BlackBerry to focus on security, IoT, enterprise

In fiscal 2016, the Canada-based smartphone maker sold 3.2 million smartphones in all, with 600,000 in Q4, 700,000 in Q3, 800,000 in Q2, and about 1.1 million in Q1. During a conference call on April 3, Chen said the company could stop making physical BlackBerry-branded handsets soon because if he can’t make money on handsets, he won’t be in the handset business.

Also in an interview with CNBC, Chen clarified, “If by September I couldn’t find a way to get there… then I need to seriously consider being a software company only.”

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It is already known that if the company’s handset making business is not able to reap good results, it would seek to move more into security, enterprise and the Internet of Things (IoT). Chen revealed plans of making a few more acquisitions this year in the IoT space and partnering with other companies in healthcare, financial and legal services.

“We are building an engineering team on the device side that is focused on security. We will do some partnerships and we will probably, potentially do an M&A on security,” Chen said.

Dim hopes for the Priv

For the quarter, BlackBerry had a goal of making $563 million in revenue, but it fell short with the Canadian firm reporting revenue of $487 million. Hardware revenues too fell short of expectations by $260 million and were reported at $189 million.

The BlackBerry Priv, a high-end Android smartphone that the company launched with hopes of rejuvenating the handset business, appears to have failed to live up to expectations. At the time of launch, Chen said that to reach the break-even point, the company will need to sell 3 million handsets.

Sales of the device will continue throughout the year, but it cannot be expected that many people except loyalists will buy the Priv. This is an indication that there are minimal chances of increasing the handset’s quarterly sales.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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1 COMMENT

  1. I don’t believe Chen and the Canadian smartphone maker is fighting back hard enough against the American tech industry. I know it has to be very difficult when phone carriers and developers all have looked the other way and turned their backs. Chen, step up and do something about it with your software business.

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