BlackBerry Ltd makes headway in the bid to boost sales in enterprise software
As device sales tumbled, BlackBerry Ltd. searched for other sources of revenue, planting a seed within the software business and nurturing the nascent unit with recent acquisitions.
This jobs are beginning to grow.
In the third quarter, revenue attributed to software and services nearly tripled to US$162 million in the same period this past year, lifted through the 2,713 enterprise customers it said hello acquired. More of its software sales are recurring, which can be relied on later on and can help stabilize volatility. It propelled BlackBerry to post better sales, earnings per share along with a narrower loss than analysts expected.
Investors on both sides from the border cheered. Shares of BlackBerry rose 9.7 per cent in Toronto to $11.95 and jumped by almost 11 percent to US$8.61 in New York, where trading volumes exploded. For the year, its shares are down six and 22 per cent, respectively.
Chief Executive Officer John Chen said Friday that BlackBerry sent a definite message in September when it bought rival Good Technology Corp. for US$425 million: spend here and trust us again.
“BlackBerry accustomed to own the damn market. It had been because, within the last number of years, with our turmoil, that others were making inroads,” Chen told a group of reporters throughout an interview in Waterloo, Ont. “The customers now know we’re seriously interested in e-commerce. They now know we are not giving them empty words about how exactly we are returning. What we have done is restore their confidence. So, they are buying.”
BlackBerry Ltd’s Priv launch seems ‘solid’ as investors await initial sales figuresBlackBerry Ltd, Sierra Wireless Inc among Canadian tech businesses that face labour shortage risk: reportBlackBerry Ltd investors win right to move ahead with Ontario securities class action
Chen’s goal for that fiscal year is for sales in software to achieve a minimum of US$500 million, meaning he’s got yet another quarter to develop a balance of US$127 million. In this period, he said US$53 million from the total amount was from a deal it signed to talk about its ip rights, the 2nd available BlackBerry has announced so far this year. About US$20 million is because of recently acquired Good and AtHoc Inc.
For some, this might indicate that BlackBerry isn’t selling enough of its enterprise software system.
“We still believe software revenue continues to be most significant metric and model US$480 million for that full fiscal year, within reach of management’s US$500 million goal,” wrote analysts at BMO Capital Markets. “However, we remain concerned it took the Good Technology acquisition and two large IPR deals to obtain there, and therefore our look at the core business at the beginning of the year was too optimistic.”
Investors were eager for an earlier indication of methods well the brand new Android-powered BlackBerry device, Priv, has been faring, but Chen didn’t disclose much. The Priv, a slider phone that offers to deliver users the very best of both touch screen and physical keyboard worlds, went on sale in November. By February, Chen expects the Priv to sell in 31 countries, from four.
In the third quarter, BlackBerry sold just 700,000 devices in an average price of US$315. Chen has said he needs to sell 5 million phones each year to achieve break even just in hardware.
“Depending on how Priv does in Q4, there’s an opportunity, I am talking about, I’m being warned with a large amount of people, there’s an opportunity we are able to achieve or get closer to break even operating profitability for that overall device business,” he told analysts.
“It’s early, with under month of Priv sales in Q3, we’re seeing positive feedback and good demand thus far.”
Whether it builds other, less costly Android phones is also determined by Priv’s success. BlackBerry initially focused its launch of the Priv, which costs $899 and US$699, at the carrier level and has started targeting its deep roster of economic clients only within the past month. Many of the those who have bought the Priv are loyalists, but Chen said the telephone can also be attractive to young, professional women.