Analyst: BlackBerry will stop producing hardware and become a profitable enterprise software firm

Analyst: BlackBerry will stop producing hardware and become a profitable enterprise software firm
TD Securities' analyst Daniel Chan believes that time is up for BlackBerry as a hardware manufacturer. With the company failing to introduce a low cost Android handset at MWC last month, Chan says that this is a sign that the company is pulling out of the hardware end of the business. Last November, the company launched its first Android powered handset, the BlackBerry Priv.
At the same time that the Priv was being released, images of a lower-end Android model code named the Vienna were leaked. Pictures of the device revealed a QWERTY keyboard, which is not hidden behind a slider mechanism like the keyboard on the Priv is. In January, BlackBerry CEO John Chen said that a new Android device would be launched later this year, but that was the last we have heard about it.

Facebook will end support for BlackBerry 10 after three more days, and WhatsApp will follow suit sometime this year. There are no new BlackBerry 10 phones in the pipeline with the Android powered Vienna the only new 'Berry supposedly in the works. But TD Securities' Chan believes that by jettisoning the hardware business completely, quickly and painlessly, BlackBerry can turn itself into an enterprise software company with revenue of $1.4 billion and profit margins of 33%. R&D spending can be reduced by as much as half. As Chan points out, eliminating hardware would put the company in a better place than it is today.

We might find out more this Friday, April 1st, when BlackBerry is set to report Q4 earnings. Wall Street expects revenue to drop 31% year-over-year with the company reporting a 9 cents a share loss.

If BlackBerry doesn't specifically make an announcement about its future this week, we are hoping that at the least it reveals how many BlackBerry Priv units have been sold. That way, we can determine if the move to Android has been a success and whether BlackBerry will continue to support the division.

Thanks for the tip!

source: ValueWalk



1. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

I hope blackberry survives, I am in particular really sorry for its hard working employees who deserved better but because of mis-management ( BB slow response to iOS and Android) are in danger of losing their source of income. I really don't see BB staying in the Mobile Hardware business but the Enterprise Security a resounding yes!! Their BES server is very competitive in corporate environments. Best to BB during their earnings call.

3. Mxyzptlk unregistered

They could have turned their outlook around. I don't think selling the Priv at full price in a highly competitive market was a good idea.

6. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Agreed. Pricing needs to be competitive if they want to realize the returns they are hoping for.

5. sgodsell

Posts: 7363; Member since: Mar 16, 2013

Blackberry Priv is a great device. However they need to get the pricing down in order to be more competitive. Now that BlackBerry went with Android, they are now competing in a sea of other Android devices and OEMs. The keyboard and some of the software is setting them apart from the competition, but they need to find something else to add on, or lower the prices.

7. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

I have the same sentiments. Not to sound like a movie trailer But "In a world of countless Android devices" BB needs to distinguish itself and the only viable way, IMO, is price. They have Name recognition so if they price it right they can get back int the game. not in a huge way but big enough to justify a follow up device.

8. Johnnokia

Posts: 1158; Member since: May 27, 2012

Actually, BlackBerry should've focused more on BB10 and kept developing it even if the sales figure kept getting down (they could keep a reasonable selling margin). BlackBerry has a very big loyal fans-base and most of those fans didn't move to Android. I guess Android was not the answer, and Priv's numbers would be very low. We will see this Friday.

2. Mxyzptlk unregistered

I've been saying this all along. Blackberry as a handset maker is long gone except for niche market and the few remaining blackberry fans left.

4. jove39

Posts: 2146; Member since: Oct 18, 2011

"... if the move to Android has been a success and whether BlackBerry will continue to support the division." I wonder what else you need to know after this decision. Move to android has already failed! How many people you think would pick blackberry device from pool of Galaxy, G and Nexus phones.

10. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Though I am skeptical it has been a roaring success. BB could have set a reasonable bar - produce this small quantity and sell half of the production and meet the proposed goal ( stock holder see this and reward the company). Either way we will know this Thursday after the closing bell ( hopefully not before in the form of BB laying off hundreds at its mobile division. If so, again as I stated earlier I am sad for those who will lose their jobs through no fault of their own).

19. Mxyzptlk unregistered

Based on what statistics though?

20. Mxyzptlk unregistered

For the roaring success of the Priv? I'm a little on the skeptical side. I don't think it has done too well.

9. meanestgenius

Posts: 22035; Member since: May 28, 2014

It's funny how articles like this always seem to pop up around the time that BlackBerry is due to announce their quarterly earnings report. Anyway: While I'm definitely going to wait to hear from BlackBerry themselves on the subject matter, BlackBerry would indeed be better off without the hardware division. Their software offerings, patent licensing, etc, is more than enough to sustain the company and move the company upward. I personally believe that BlackBerry will remain in hardware, especially since there is still a need for the most secure hardware/software combination, no matter how "niche" it may be. Whatever the outcome, as long as BlackBerry remains in business, be it with the hardware division or without, I'm good with that.

12. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

@meanestgenius Happy to see you on this thread as you are the resident BB enthusiast. If I can ask what is your gut feeling on what we will hear on Thursday? Just asking if you could speculate. As I see it, I am hoping for the best but, my gut tells me BB will be announcing some major restructuring again with the sale of the mobile division,

14. meanestgenius

Posts: 22035; Member since: May 28, 2014

Could actually go either way, but I'm going to go with BlackBerry continuing on with their hardware division. I think the PRIV has sold enough to warrant that, and I've been hearing from the BlackBerry community that BB10 devices have actually sold better than expected. Definitely looking forward the BlackBerry's ER this week.

15. PhoneCritic

Posts: 1354; Member since: Oct 05, 2011

Okay fair enough. Like you I don't want to see them out of the game and especially for the workers at the mobile division. However, lets wait and see on Thursday. Thanks for the reply

16. meanestgenius

Posts: 22035; Member since: May 28, 2014

Anytime. I enjoy good conversation with fellow tech enthusiasts.

11. Bernoulli

Posts: 4360; Member since: Sep 01, 2012

whether BlackBerry will continue to support the division. That has been confirmed before by BlackBerry that regardless them exiting the industry they will continue to support their products.

13. artificialintelligence

Posts: 166; Member since: Dec 05, 2015

It's blackberrys own fault , pricing the priv at a high price at $700+ to many devices on the market that perform better for the same money or less

18. Mxyzptlk unregistered

+1. The Priv could have been a way for BlackBerry to become relevant again but $700 price tag against competition like the Moto X and the Nexus phones is ludicrous. They're still charging $700 even though we have newer devices out with better specs. I'm going to stop before I ramble on too much.

21. artificialintelligence

Posts: 166; Member since: Dec 05, 2015


22. megathaszrul89

Posts: 203; Member since: Jan 08, 2015

Am i the only one who is sad about this news?

23. Crispin_Gatieza

Posts: 3137; Member since: Jan 23, 2014

I remember last March with the same doom and gloom from the "experts". Nobody truly knows what the sales figures for the Priv are but now they're on the top 3 carriers in the US and I'm not seeing any price reductions. Either it's selling as expected or the profits are insane.

24. meanestgenius

Posts: 22035; Member since: May 28, 2014

Agreed. These types of articles pop up for BlackBerry every year, same old "doom and gloom" scenario. If the PRIV wasn't at least selling as expected or bringing in pretty decent profits for BlackBerry, we would have seen a price reduction by now.

26. Nate650

Posts: 41; Member since: Nov 11, 2015

Interesting point. Given the laws surrounding supply and demand, that makes sense. Let's hope that's the case! The Priv is the most unique smartphone to come out in years and I would hate to see their efforts go to waste.

25. grbrao

Posts: 294; Member since: Nov 23, 2012

I wish and pray this never happen. BB10 OS is excellent and runs very smooth and they keep improving it with updates. This is the only phone which i can relay on for my work and business. I have used ios and andriod devices and nothing was near to the blackberry experience. Hub is more than enough to keep other OS out of me... Now our world is more about show off and brainwashed by media, it is hard for something like blackberry to sustain... I wish blackberry will never die and make good hardware in future..... its long been due for sucessor of Z30.... still waiting.... i will never give up on it...........

27. xq10xa

Posts: 810; Member since: Dec 07, 2010

Well who didn't see this coming.....

28. joeone2006

Posts: 18; Member since: Mar 31, 2016

This company offers no value to anyone. The are terrible at what they do and have become an embarrassment to the mobile market. The PRIV is a joke, BB10 is also another joke.

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