BlackBerry considers phone bail-out as losses grow

BlackBerry’s transition from a handset manufacturer to software vendor continues to encounter difficulties.

Losses reached $655 million (£443m) year-on-year in its first quarter results, as the company continues to restructure and write down some assets.

Losses were up from $89 million (£60m) year-on-year and $208 million quarter-on-quarter, but the figures look more positive when the one-time costs are eliminated from the equation.

And BlackBerry was keen to point to “record” software and services revenue for a first quarter, although it is true that revenue in the division rose by a modest $5 million (£3.38m) to $142 million (£95.6m).

But its mobility solutions unit saw revenues fall from $269 million (£182m) to $152 million (£103m) year-on-year, while service access fees more than halved from $252 million to $106 million during the same period. In total, revenues fell from $658 million (£445m) to $400 million (£270m).

There was some other good news however, as BlackBerry won 3,300 enterprise customers during the past three months.

“BlackBerry is differentiated by cross-platform market leadership in software, an end-to-end secure mobility platform and a strong financial foundation. Our Q1 results highlight these attributes,” a defiant CEO John Chen told investors.

“In our Mobility Solutions business, our objective is to achieve operating profitability in the short term.”

BlackBerry was once the market leader in smartphones but its market share has shrunk to less than one percent in recent times. While Apple, Samsung and others were able to erode BlackBerry’s advantage in security and compliance, BlackBerry’s perpetually delayed BlackBerry 10 operating system meant it was unable to offer devices that had the features end users desired.

A number of critically-acclaimed “keyboard” devices and the Android-powered Priv have failed to arrest this decline.

Reuters reports that Chen has given the handset division until the end of the year to return to profitability or it might quit the market entirely. A decision could be made as early as September, and it is clear BlackBerry sees the future in software and the Internet of Things (IoT).

“I don’t personally believe handsets will be the future of any company,” Chen reportedly said at an investor meeting.