Mon, Dec 22, 2014 - Page 15 News List

BlackBerry reduces losses as revenue falls

NY Times News Service, OTTAWA

BlackBerry Ltd chief executive officer John Chen (程守宗) thinks people who have been waiting for the demise of his troubled company can stand down. At least for a while.

During his 13-month tenure running the once-dominant handset maker, Chen has stabilized BlackBerry.

However, a revenue drop reported by the company for its third quarter on Friday last week again showed that it had yet to benefit substantially from his plan to focus on software and services rather than phones.

BlackBerry reported revenue of US$793 million during the three months that ended last month, down from US$1.1 billion in the same period a year earlier. And despite the introduction of a heavily publicized phone in September, revenue declined from US$916 million in the previous quarter.

BlackBerry said it lost US$148 million, or US$0.28 a share, during the quarter, compared with a loss of US$207 million, or US$0.39 a share, in the second quarter. In the period a year earlier, BlackBerry recorded a loss of US$4.4 billion, or US$8.37 a share — a disastrous showing that led to Chen’s arrival.

In a conference call with analysts, Chen asked for patience, indicating that the sales gains from his strategy would not appear until June next year.

The company’s most recent phones and its BlackBerry 10 operating system have partly caused service revenue decline. Unlike phones based on previous operating systems, the new handsets do not automatically generate monthly service fees by using BlackBerry’s proprietary communications network. Corporations and governments must now elect to buy those services.

Earlier this week, Chen introduced a new phone that physically resembles its older handsets, which remain the BlackBerry of choice for many corporate users, but which uses the BlackBerry 10 operating system.

If, as he expects, large numbers of corporate customers switch to the BlackBerry Classic, Chen said the new phone would initially add to the service revenue decline.

The company said much of the third quarter’s loss came from a US$150 million re-evaluation of some of its debt. The company also had restructuring charges of US$5 million in the period.

The 33 percent revenue decline over the previous quarter came from the hardware and software and services sides of the company.

In the last quarter, the company’s software and services revenue fell to US$54 million compared with US$56 million a year ago.

The company said that consumers and businesses bought 1.9 million of its phones in the three-month period, compared with 2.4 million in the previous quarter.

By comparison, Apple Inc sold about 10 million iPhone 6 and iPhone 6 Plus handsets in the first three days after their introduction in September.

Chen said that very few sales of BlackBerry’s Passport phone, with a large, square display, introduced in September were recorded during the third quarter, but the phone shipped late in the quarter.

It also appears that the Z3, a phone introduced last spring to maintain the company’s advantage in markets like Indonesia, has been less than an overwhelming success.

While he did not offer specific numbers for sales of the Z3, which was developed in a joint venture with Foxconn Technology Group (富士康科技集團), Chen characterized them as “respectable.”

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