Is the Priv smartphone a hit? BlackBerry says it's too early to tell

WATERLOO, Ont. -- BlackBerry is getting a financial boost from its growing software division, but the smartphone company says it's still to early to deem its latest Priv phone either a sales success or a disappointment.

See Full Article

With about a month of sales for the new device under its belt, BlackBerry was vague Friday in its third-quarter results about how its first Android smartphone has performed so far in the marketplace.

"I don't want to over-hype that situation," chief executive John Chen told analysts Friday as BlackBerry delivered better-than-expected financial results.

He settled with saying Priv sales have been "quite positive."

Shares of BlackBerry jumped more than 10 per cent on Friday -- rising $1.14 to $12.03 on the Toronto Stock Exchange -- as investors responded favourably to the company's latest quarterly results.

Overall revenue came in above expectations and losses were far less than analysts had anticipated.

The international reception of the Priv will be closely watched in the coming weeks as BlackBerry prepares to launch it on a global scale.

After being available in only four countries during the third quarter ended Nov. 28, the phone's distribution will spike to 31 countries by the end of February when the company's fourth quarter ends.

BlackBerry is in the midst of a transition period where its software business has taken priority over designing phones. Sales of the Priv are considered an important metric in determining whether there's any hope in making future hardware.

Chen expects the handset division will become profitable again within the next two quarters, one of his key objectives since joining the company in late 2013, which suggests BlackBerry will stick with phones.

Even with the signs pointing to a future in hardware, Chen is reluctant to fully commit until he sees international sales figures.

"The next three months will tell us a lot," he said in a conversation with reporters at the company's headquarters in Waterloo, Ont.

The lack of Priv sales figures prevents investors from getting a clear picture of how many people bought the phone in its early days.

Chen said those numbers would be "misleading" because it took time to get the devices into stores.

However, BlackBerry did provide some insight through its usual tally of overall device sales, which include the Passport and other older models that use the company's own operating system.

About 700,000 devices were sold, which is a steep decline from 1.9 million at the same time last year and also down from 800,000 in the second quarter of this year. But the average sales price jumped to $315 from $240, suggesting a large quantity of sales came from more expensive Priv phones.

The Priv is also appealing to a different segment of the market than other recent BlackBerry phones, Chen said. In particular, the Priv is selling especially well with young professional women.

"I think it's more of a form factor situation," he said, noting that with its older Passport model "almost every customer is male."

In the third quarter, BlackBerry reported a net loss of US$89 million or 17 cents per share under standard accounting rules.

After adjustments, BlackBerry lost US$15 million or three cents per share -- far less than analyst expectations of a loss of 14 cents per share, according to Thomson Reuters.

Revenue was US$557 million, a slight improvement from $548 million a year ago and about $64 million more than analyst predictions.

Within its divisions, the shift away from an emphasis on phone sales continued.

Software and services revenue more than doubled to $154 million from $57 million a year ago, driven by the recent acquisition of Good Technology Corp.

Hardware revenues, which account for device sales, dropped to $214 million from $361 million a year ago.

Chen teased analysts with the possibility of new software for self-driving vehicles. He said more details will be revealed at the Consumer Electronics Show in Las Vegas next month.

BlackBerry's QNX division, headquartered in Ottawa, has spent years developing various automotive technology such as dashboard infotainment systems used by Ford Motor Co., General Motors, Hyundai and Volkswagen.



Advertisements

Latest Economic News

  • Online cannabis dispensaries join in on Black Friday sales

    Economic CTV News
    Online cannabis dispensaries are the latest to cash in on the holiday shopping frenzy, with some offering dramatic markdowns or novelty products as the season known for consumer spending gets underway. Several online cannabis stores are holding Black Friday sales for the first time this year in an effort to stay competitive and draw new customers in what they call an increasingly competitive market. Source
  • Why France hates Black Friday: 'I find it sad'

    Economic CTV News
    Having adopted hamburgers, Halloween and a host of English words, some in France are worried about the latest cultural import from America: the day of rampant consumerism known as Black Friday. Unheard of only a few years ago, the cut-price deals made the television news bulletins Friday as local retailers copied their American counterparts in trying to lure in shoppers ahead of the Christmas season. Source
  • Canadian operating profits top $100B amid financial sector strength

    Economic CTV News
    OTTAWA -- Statistics Canada says strong performance in the financial sector drove Canadian corporate operating profits to just over $100 billion in the third quarter, up 17.2 per cent from the same period last year. Source
  • WestJet launches new regional air service in Western Canada

    Economic CTV News
    CALGARY -- WestJet Airlines Ltd. (TSX:WJA) has introduced a new regional air service in Western Canada operating under a capacity purchase agreement with B.C.-based Pacific Coastal Airlines Ltd. WestJet Link will connect the Alberta communities of Lethbridge, Lloydminster and Medicine Hat and the B.C. Source
  • Aurora formally launches hostile takeover bid for CanniMed Therapeutics

    Economic CTV News
    TORONTO -- Aurora Cannabis Inc. formally launched its all-stock hostile takeover bid for CanniMed Therapeutics Friday, on the condition that the medical marijuana producer cancel its own planned acquisition of Newstrike Resources Ltd. The Vancouver-headquartered licensed marijuana company says in a statement it placed a newspaper ad for its offer to acquire all issued and outstanding shares for up to $24, and a takeover bid circular will be mailed to CanniMed's shareholders. Source
  • CEO Suzanne West vows to pursue greener path after oil firm splits with backers

    Economic CTV News
    CALGARY - One of the few female CEOs in the Canadian oilpatch says she has parted ways with her American financial backers and her Calgary company's oil and gas assets have been taken over by a newly-created entity. Source
  • Ontario gaming agency will expand online and mobile betting

    Economic CTV News
    TORONTO -- Think you know when U.S. President Donald Trump will be impeached? How about who the next James Bond will be? Or perhaps you have an inside track on the name of the next royal baby? Source
  • Aurora Cannabis launches hostile takeover bid for CanniMed Therapeutics

    Economic CBC News
    Aurora Cannabis Inc. formally launched its all-stock hostile takeover bid for CanniMed Therapeutics Friday, on the condition that the medical marijuana producer cancel its own planned acquisition of Newstrike Resources Ltd. The Vancouver-headquartered licensed marijuana company says in a statement it placed a newspaper ad for its offer, valued at $24 per share, and a takeover bid circular will be mailed to CanniMed's shareholders. Source
  • Aurora takeover bid 'makes no sense,' based on inflated share price: CanniMed

    Economic CBC News
    Aurora Cannabis Inc. formally launched its all-stock hostile takeover bid for CanniMed Therapeutics Friday, on the condition that the medical marijuana producer cancel its own planned acquisition of Newstrike Resources Ltd. The Vancouver-headquartered licensed marijuana company says in a statement it placed a newspaper ad for its offer, valued at $24 per share, and a takeover bid circular will be mailed to CanniMed's shareholders. Source
  • Amazon workers in Germany, Italy stage Black Friday strike

    Economic CTV News
    BERLIN -- Workers at a half dozen Amazon distribution centres in Germany and one in Italy walked off the job Friday, in a protest timed to coincide with "Black Friday" to demand better wages from the American online giant. Source