Blackberry Turnaround Plan Gains Traction

Wait. There's a real Blackberry turnaround plan? Does nothing in tech ever just die? JL

David Crow reports in the Financial Times:

Some analysts expect BlackBerry to sell off its handset business once its software division has sufficient scale.
BlackBerry’s attempt to turn itself from a smartphone maker into a software group gained traction in its most recent quarter, sending its shares up more than 10 per cent to close at C$12.03 in Toronto.

The Canadian group is trying to pivot towards sales of software to companies and governments, having become little more than a bit-part player in the smartphone market it helped pioneer, which is now dominated by Apple and Samsung. 

BlackBerry comfortably beat Wall Street expectations, posting an adjusted loss per share of three cents on revenues of $557m in its fiscal third quarter, which runs from August to November. Analysts had been expecting a loss of 14 cents on revenues of $489m.
The company’s fledgling software business grew strongly, generating revenues of $128m, versus $74m in the prior quarter. Analysts had typically expected the division to report sales of $102m.

BlackBerry has tried to expand its software division in recent months through a string of acquisitions, including Good Technology, a mobile security provider it bought for $425m in September, and AtHoc, a company that helps build emergency alert systems for governments. 

“We delivered accelerating growth in enterprise software and higher revenue across all of our areas of focus,” said John Chen, chief executive.

He added that BlackBerry’s latest handset, the Priv, had been “well received” since it launched last month, although he declined to give sales figures. 

The Priv represented a major departure for the company because it was the first BlackBerry to run on the Android platform rather than its own proprietary operating system, a switch designed to address complaints about a shortage of apps for the devices.

Some analysts expect BlackBerry to sell off its handset business once its software division has sufficient scale. “We believe BlackBerry will likely look at strategic alternatives, such as further restructuring [and] potential divestitures,” said Maynard Um, an analyst at Wells Fargo.
Mr Chen said the lossmaking handset division could break even in the next quarter depending on sales of the Priv, which analysts say would make it more attractive to a potential buyer.