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.


Latest Economic News

  • Experimental pot lab sprouting cannabis-infused drinks, new edibles

    Economic CTV News
    SMITHS FALLS, Ont. -- Nestled inside Canopy Growth Corp.'s sprawling marijuana facility outside Ottawa is a laboratory where technicians in white lab coats and hair nets bustle about, pipetting fluids into glassware as machinery hums and coloured, three-dimensional graphs flash on nearby screens. Source
  • Global vanilla prices squeeze margins for ice cream, cupcake makers

    Economic CTV News
    TORONTO -- Prepare to shell out a little more for the sweet treats of spring and summer as a global surge in the price of vanilla makes its impact at some small-batch ice cream shops and neighbourhood bakeries. Source
  • Companies experiment with killing the barcode on event tickets and in stores

    Economic CTV News
    TORONTO -- When fans score tickets for events at the Burton Cummings Theatre in Winnipeg in the future, they might notice the absence of a familiar feature: that ubiquitous zebra-styled inventory tracker bar that adorns almost every retail product imaginable. Source
  • Tickets without barcodes: Concert venues experiment with new systems

    Economic CBC News
    When fans score tickets for events at the Burton Cummings Theatre in Winnipeg in the future, they might notice the absence of a familiar feature: that ubiquitous zebra-styled inventory tracker bar that adorns almost every retail product imaginable. Source
  • Canadians see possible signal U.S. ready to accept NAFTA compromise

    Economic CTV News
    OTTAWA -- American trade officials are showing newfound interest in a Canadian proposal for revamping NAFTA's automotive provisions as the U.S. seeks to swiftly conclude renegotiations of the continental free trade pact. And that's being taken in some quarters as a sign that the U.S. Source
  • The dirty truth about makeup and the oil change debate: CBC's Marketplace consumer cheat sheet

    Economic CBC News
    Miss something this week? Don't panic. CBC's Marketplace rounds up the consumer and health news you need. Want this in your inbox? Get the Marketplace newsletter every Friday. Internet prices dialing up Your internet bill could get even more pricey. Source
  • After overcharging for bread, should Loblaws demand ID for a $25 gift card?

    Economic CBC News
    Jenn Iskiw says she'll be grocery shopping elsewhere after feeling betrayed by Loblaws — twice. First, for artificially inflating the price of bread for 14 years, and second, for demanding she send ID to get a $25 gift card offered as compensation for bread price fixing. Source
  • Facebook suspends data analytics firm that worked for Trump campaign

    Economic CBC News
    The Massachusetts attorney general said on Saturday her office was launching an investigation after reports that Cambridge Analytica had harvested private information from more than 50 million Facebook users in developing techniques to support U.S. President Donald Trump's 2016 election campaign. Source
  • Trump's goal of 'energy dominance' could change the global balance of power

    Economic CBC News
    Fuelled by technological breakthroughs and cuts to taxes and regulation, the United States is on target to become the world's biggest producer of crude oil in the next five years. Let that sink in. The U.S will be bigger than Russia and Saudi Arabia. Source
  • How to avoid spending money on unnecessary oil changes

    Economic CBC News
    Oil changes are by far the most common service performed on vehicles in Canada. Customers pay quick lube facilities, private garages and dealer maintenance centres well over a billion dollars a year for the service. But a CBC investigation finds many of us may be changing our oil far more often than automakers require. Source