BlackBerry chief John Chen said he is “confident in our strategy and continued progress” despite a 47 per cent fall in fiscal Q2 revenue, as the company also confirmed it is set to offer its first smartphone powered by Android.
It will launch a “flagship slider device”, called Priv, which will run Android alongside “the best of BlackBerry security and productivity”. It is expected to be available in Q4, and more details will follow in the coming weeks.
On a conference call, Chen said the device is targeted at ex-BlackBerry users who miss the physical keyboard but enjoy Android apps. He called it “the most secure Android device on the market.”
Chen said that the second quarter of fiscal 2016 was its fourth consecutive period of year-on-year double-digit growth in software licensing revenue and sixth consecutive quarter of positive free cash flow.
“In order to expand our leadership in cross-platform software and services, we are investing strategically – organically through new products and services based on the BES platform, and through acquisitions like AtHoc and Good,” he continued.
BlackBerry announced its $425 million acquisition of Good Technology after the close of the quarter. It is expected to complete toward the end of the current period, subject to closing conditions and regulatory approval.
BlackBerry 10 support
In a statement, the company said that despite its support for Android, it “remains committed to the BlackBerry 10 operating system, which enables industry-leading security and productivity benefits”. Some observers had suggested that the company would be better off in abandoning its own platform, due to its limited device shipments and the resources required to maintain it.
BlackBerry said it will “continue to develop and enhance the BlackBerry 10 operating system” and is confirming plans to release platform updates focused on security and privacy enhancements, with version 10.3.3 scheduled for March 2016.
However, on the conference call, Chen didn’t rule out merging or replacing the BlackBerry 10 business with Android. And Chen has admitted there are no plans for a new BlackBerry 10 device this year.
For the quarter to 29 August, the company reported a profit of $51 million, compared with a prior-year loss of $207 million, on revenue of $490 million, down from $916 million.
On a non-GAAP basis it saw a loss of $66 million, when excluding the impact of various financial transactions and charges.
The revenue breakdown was approximately 15 per cent for software and services, 41 per cent for hardware, and 43 per cent for service access fees.
It said it had 2,400 enterprise customer wins in the quarter, with approximately 60 per cent of the licences associated with them being cross-platform.
During the quarter, BlackBerry recognised revenue on more than 800,000 BlackBerry smartphones, with an average selling price of $240.
Looking forward, it “anticipates modest sequential growth in total revenue” for the remaining quarters in fiscal 2016. Chen added that the company is on track to achieve $500 million in software and services sales by year end.