BlackBerry makes €606m loss as it considers smartphone exit
Published 27/06/2016 | 08:29
BlackBerry has reported its biggest loss in over two years as the Canadian mobile company’s handset business continues to struggle, raising the chances that the once-mighty smartphone maker will stop selling phones.
The company’s keyboard-enabled smartphones were once de rigeur among professionals, but it has struggled to adapt to a world dominated by touchscreen competitors from Apple and Samsung.
Under chief executive John Chen, BlackBerry has focused its efforts on corporate software and services, and made cuts to its smartphone business in an attempt to make it profitable.
For the three months to end of May, the company reported a $670m (£450m) loss, compared to a $73m profit a year earlier and and a $256m loss in the previous quarter. Although much of the loss was down to restructuring charges, sales also fell to $400m, down 39pc on a year earlier.
Last year, BlackBerry attempted to revitalise its handset business by releasing a smartphone running Android, the operating system developed by Google, rather than its own.
However, early sales figures have been disappointing amid criticism the device is too expensive. Although it plans to release cheaper phones later this year, BlackBerry has said it will decide whether to stop making phones for good by September.
“The device business must be profitable, because we don't want to run a business that drags onto the bottom line,” Mr Chen said at BlackBerry’s annual meeting. “We've got to get there this year.”
He appeared to suggest, however, that the company’s future lies in the security and identity software services it sells to businesses, rather than smartphones. “I don’t personally believe handsets will be the future of any company,” Mr Chen said.
Shares rose despite the loss as investors welcomed evidence of cost cutting and better-than-expected software revenue.