BlackBerry’s Finances Benefit From Smartphone Exit

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BlackBerry’s losses narrow as company’s optimism rises in post-smartphone era

BlackBerry’s decision to stop making the handsets that made it a household name is appearing to pay dividends thanks to growing demand for its enterprise software and services.

Once the mobile leader in the enterprise market, BlackBerry’s share has fallen dramatically since the turn of the decade as it failed to keep up with changes in demand, while Apple and Android manufacturers caught up in security and administration features.

A last-ditch attempt to revive its fortunes by switching from the delayed BlackBerry 10 OS to Android failed, despite critical acclaim.

BlackBerry KeyOne

BlackBerry boost

The company ditched direct smartphone manufacturing last September and instead licenses its brand to third parties, allowing it to focus on management, security and Internet of Things (IoT) technologies.

That decision has reduced costs and boosted profit margins. During the past three months, losses narrowed from $238 million to $47 million as BlackBerry received 3,500 customer orders. Furthermore, 80 percent of its software and services income is now recurring.

CEO John Chen said the performance exceeded expectations.

“In the quarter, we continued to grow our mix of software and services revenue across the company,” he said. “In our enterprise business, we had one of our best-ever software billings quarters, driven by strength across regulated and non-regulated industries. Enhancing our position in public sector, we recently achieved FedRAMP certification for the U.S. government. In IOT appliances, we won new business and secured six new customer trials for Radar.

“We demonstrated our autonomous driving technology platform at CES 2017. In mobile software licensing, we signed our third major agreement, and we now have global coverage. We are entering the next phase in sub-licensing our secure software to a variety of new mobile endpoints.”

The most recent handset to be designed by the company in-house was the BlackBerry KeyONE, a QWERTY smartphone built by TCL Communications and shown off at Mobile World Congress.

Quiz: Are you a BlackBerry master?

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