Poor sales could sink BlackBerry’s handsets

BlackBerry Ltd. could rid itself of its hardware business as early as September if CEO John Chen’s plans to make the segment profitable by then fail to pan out.

The smartphone maker — and increasingly, software company — reported Friday that it more than doubled software and licensing revenue in its fiscal fourth quarter, while it continued to see steep declines in handset sales. BlackBerry sold just 600,000 smartphones during the period, despite the release of its new Android device, the Priv.

Chen was optimistic about the future of BlackBerry devices during a conference call Friday. He blamed the low sales in the recent quarter on a lengthy contract negotiation with Verizon Wireless, which delayed Priv sales.

But he also gave the firmest sign yet that he has no plans to continue indefinitely losing money on hardware.

“I made a statement — I need one year to make the device business profitable — I made the statement in September of last year and I intend to hold myself to that,” Chen told CNBC on Friday. “I do believe we will get to profitability before that.”

Just five years ago, BlackBerry’s handset sales were averaging more than 13 million a quarter.

Rivals, meanwhile, boast sales in the tens of millions as smartphone sales continue to rise. While hardware sales tumble, enterprise services and software development are up.

BlackBerry stock was down eight per cent Friday to $9.69. While earnings beat expectations, revenue was $487 million US before a writedown related to a recent acquisition. Analysts had been expecting revenue of $563 million US.