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BlackBerry Still Losing Money, Yet Optimistic
BlackBerry Still Losing Money, Yet Optimistic

By Barry Levine
March 30, 2014 5:32PM

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Pleased that his company lost less money than expected, it seems that BlackBerry CEO John Chen is taking his company back to the future. The handset maker is planning to relaunch its older BlackBerry 7 OS and roll out new phones that focus on BlackBerry's classic feature -- the physical keyboard.
 



BlackBerry is still refining its business strategy as it attempts to return to profitability after several troubled years. On Friday, John Chen, the Canadian company's chief executive, clarified that BlackBerry is still interested in selling smartphones at the same time it makes further headway into related markets for software and services.

Chen, the former head of Sybase, became CEO of BlackBerry four months ago, facing numerous challenges to bring the struggling company back to profitability.

In an earnings call covering fourth quarter results for fiscal 2014, which ended March 1, Chen told investors that his company is intending to relaunch its older BlackBerry 7 OS. "I hope nobody thinks we don't take seriously the handset business," he said.

In fact, Chen told news media that new phones will be released in the next 18 months that emphasize BlackBerry's classic feature, the physical keyboard. Chen told Canada's CBC News that at least three different next-gen, "keyboard-centric" phones are currently in the works.

BBM for Desktops

Chen's sentiments follow indications late last year that the company was steering itself toward software and related services, such as its mobile device management (MDM) suite, the QNX operating system for cars, and its popular BlackBerry Messenger (BBM) service.

The company's Q20 phone was shown at the annual Mobile World Congress trade show in Barcelona last month, and is expected to go on sale by the end of this year. It includes a "classic" keyboard, and features the return of commands keys like Menu or Send.

Chen has also said that BlackBerry is considering bringing BBM, which now has over 80 million users and half a million chat rooms, to desktop computers. The instant messaging service is highly popular among smartphone users, and the company is interested in expanding its reach toward the growing social business segment currently populated by the likes of Microsoft's Yammer. An enterprise-oriented BBM Protected, designed for the stringent needs of regulated industries, was announced last month.

The CEO has mentioned the possibility that business users could begin chats on their PCs and then continue the same chats on their mobile devices, without interruption. Last month, the company promised to make BBM available for Windows Phone and Nokia's upcoming line of X phones. In addition to BlackBerry phones, BBM became available last year for iOS and Android devices.

Fiscal 2016 for Turnaround

Meanwhile, the company reported Friday that its loss for the fourth quarter was $423 million on revenue of $976 million. That's a huge loss, of course, but still less than expected. Chen told analysts that, in light of the ongoing turnaround efforts, he was "obviously extremely pleased" with the results and with the company now being back in "execution mode." Yet, last year for the same quarter, BlackBerry showed a profit of $98 million on revenue of $2.7 billion.

The revenue breakdown for the most recent quarter was roughly 56% from services, 37% from hardware, and 7% from software and other sources. The relatively small percentage of income from hardware could indicate that there's still plenty of room for growth if BlackBerry can regain its foothold selling keyboard handsets.

To help achieve the much-needed turnaround, BlackBerry has been aggressively cutting its costs through such measures as reducing its workforce by one-third, and outsourcing its production to manufacturer Foxconn. BlackBerry has already sold its U.S. headquarters, and is planning to sell much of its real estate in Canada.

At the March 28 briefing in the company's Waterloo, Ontario headquarters, Chen told reporters that the financial turnaround won't happen this year. He foresees it will more likely be in fiscal 2016, which begins April 1 next year.
 

Tell Us What You Think
Comment:

Name:

Gautam Ghosh:

Posted: 2014-04-16 @ 11:16am PT
Any Mobile manufacturing company focuses specially on India, because of its huge market potentially. Make utility softwares free and cutoff rates on BBM Plans with ISP,mark my word it will run in big profit in few months

chandani singh:

Posted: 2014-04-13 @ 4:25am PT
They should not give up. I love BlackBerry software. They should spend some money in advertising and marketing for sure!!



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