BlackBerry on the road to recovery with raising revenue

BlackBerry’s saga in the mobile realm has been a long and arduous one, but unlike many other industry titans of old, the Canadian giant has managed to hold on to its business, adapting as best it can. After a prolonged period of steady decline it now appears that the company’s damage control and course correction are finally starting to work with a new rising hope of returning to profitability.

The good news became evident after Q3 financial results were published, showing a 13 percent rise is stocks and shrinking overall losses. This has been achieved through strategic marketing and investment in both software and hardware sales, part of which can definitely be attributed to the OEM’s well-received bold step into the Android realm with the BlackBerry Privhandset.

But even before the Priv hit shelves, BlackBerry had already put into action a new and improved licensing strategy for its rich software suite to combat steeply declining revenue form legacy system access fees and this time around, the measures seem to be showing results. Morningstar analyst Brian Colello commented on the matter saying:

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.

Financial figures also back this statement. Apart from the aforementioned raise in stocks, the Ontario-based company also shrunk losses to 3 cents a share for a total on $15 million, besting analyst predictions of as much as $14 cents per share. Software revenue more than doubled in the quarter and so did device revenue form $201 million to $214 million, mostly thanks to the Priv.

The air of optimism is definitely present, so much so, that chief executive John Chen has predicted a return to sustainable profitability in fiscal 2017. He even stated that the company could potentially break even from prior losses in this quarter, but this was postponed in favor of strategic software and hardware investments.

As for the Priv, the bold experiment definitely proved successful, accounting for a lot of the aforementioned device revenue growth. Sales figures actually show that BlackBerry sold less devices during the quarter – 700,000, as opposed to the prior 800,000, but average selling price has jumped from $240 to $315, making for the overall increase in income. When asked about the future of BlackBerry’s device business, Chen confirmed that a move to Android is indeed a possibility and does save a lot of production costs.

We’re planning on other Android phones, but it all hinges on how we do with the Priv …

However, abandoning hardware entirely is still a possibility, if it turns out to be the better course of action, despite the OEM’s best desire to stay in the device business.

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

Source 1 | Source 2


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