With only limited distribution of its newest handset, the Android-powered Priv, BlackBerry isn’t commenting on how the device is faring in the market.
The company posted a narrow loss of three cents per share on revenue of $557 million, with was up 15 percent over the previous quarter, but down 44 percent year over year.
BlackBerry began billing revenue from its acquisition of Good Technology, an EMM provider it purchased in September for $425 million. Overall software revenue was $161.5 million for the quarter, which bodes well for CEO John Chen’s goal of $500 million in software revenue for the fiscal year ending in March.
Hardware still comprised the highest percentage of revenue at 40 percent, followed by service access fees at 31 percent and software and services at 29 percent. Chen noted that the legacy service access fees associated with older BlackBerry 7 devices, while still a significant part of the company’s overseas business, will soon be offset by additional revenue from its software and services division. Shareholders have been concerned that the company wouldn’t be able to make up the difference once that disappearing business dried up.
“I am pleased with our continued progress on BlackBerry’s strategic priorities, leading to 14 percent sequential growth in total revenue for Q3. We delivered accelerating growth in enterprise software and higher revenue across all of our areas of focus,” said CEO John Chen. “Our new Priv device has been well received since its launch in November, and we are expanding distribution to additional carriers around the world in the next several quarters.”
BlackBerry isn’t talking Priv sales numbers, since the quarter only included three weeks of actual sales, and the US is still under an AT&T exclusive until early next year, but Chen was bullish on the hardware division. In fact, the company isn’t talking hardware sales at all, though based on the 40 percent revenue breakdown it’s clear handset numbers are trending down. He noted that the company would not protract its hardware endeavours if it wouldn’t bring shareholders value.
“My first goal is to get devices in break-even. Maybe this quarter, maybe a quarter later. I have been very vocal, if I cannot get there I will not keep taking my investors through that. At this moment in time I’m looking at getting to break even and begin adding value,” he said during an investor call.
The Priv is expanding into 31 countries next year, which should spur growth in the hardware division, based on early analysts’ estimates. The Android device, even in its limited time on the market, has positively impacted the company’s average sales price, which rose to $315 from $240 a quarter earlier.
BlackBerry’s stock reacted positively on the news, as the adjusted revenue was higher, and net loss lower, than analysts expected for the quarter.