BlackBerry takes another swing at better smartphone sales with an Android device

With its hardware sales still flagging BlackBerry's chief executive John Chen says he's found a different way to sell his devices.

WATERLOO, Ont. — With its hardware sales still flagging BlackBerry’s chief executive John Chen says he’s found a different way to sell his devices.

For the first time in BlackBerry’s history, the company is going to sell a smarphone that runs on somebody else’s programming rather than its own in-house creation.

BlackBerry will release the Priv phone later this year, which uses Google’s popular Android operating system.

The switch was a controversial decision at BlackBerry, Chen said in an interview Friday with reporters at the company’s Waterloo, Ont. headquarters, but it addresses one of the biggest marketing problems BlackBerry faced in recent years: its phones are missing some of the most popular apps and games used by most customers and even businesses.

“I am now going to eliminate apps as an excuse not to buy our phone,” Chen said. “We’ll see how it goes.”

Amid all of the financial troubles of recent years, BlackBerry’s lack of apps has been a thorn in its side. Handfuls of popular apps, from dating service Tinder to Candy Crush, were unavailable for years.

Chen tried to remove that problem last fall in a partnership with the Amazon Appstore, which offers thousands of apps built for the Android operating system.

His hope was that Amazon’s store would see its app selection multiply quickly after the launch of the Amazon Fire phone last year.

“I was dying for Amazon to be successful with their phone,” Chen said.

But when sales of Amazon’s first device failed to ignite it left Chen in a partnership that wasn’t quite as ideal as he’d hoped — many apps, like Netflix and Snapchat, were still missing from the mix — and sales showed that customer weren’t swayed by the proposition.

BlackBerry hopes the Priv will give it another swing at making a smartphone that competes with the best of them, despite calls from some analysts for the company to shut down its hardware development all together.

Chen has remained a staunch supporter of BlackBerry phones partly because “marquee customers” like government agencies and other power players use the device, he said.

But the CEO plans to make an ultimate decision on whether to pull the plug on BlackBerry hardware during the next fiscal year, after the Priv hits the market.

“I promise you that I do not like running a business at a loss,” he said.

Whether introducing Google’s Android operating system into the mix will improve sales of BlackBerry phones remains to be seen.

BlackBerry (TSX:BB) missed already low expectations on Friday as its second-quarter financial results that showed it’s still struggling to turn around its business. The company reported a profit of US$51 million for the three months ended Aug. 29, which was an improvement on the year-earlier net loss of US$207 million.

But it fell short of expectations with an adjusted loss of US$66 million or 13 cents per share — deeper than the nine cents per share that had been estimated.

Revenue for the quarter dropped 46 per cent from a year ago to US$490 million, which was well below analyst estimates of US$611 million and the $658 million recorded by BlackBerry in the previous quarter that ended in May.

BlackBerry phone sales also continued their decline, falling to a dismal 800,000 units around the world, a further slide from the 1.1 million phones sold in the company’s first quarter.

Chen has focused on reworking BlackBerry’s operations since he joined in November 2013, with tight cost management and cheaper smartphone production being two major objectives.

Strengthening software licensing and services revenues has been part of Chen’s priorities. He said revenues for that part of its business grew 19 per cent to $74 milllion during the quarter.

The Waterloo, Ont.-based company has issued widespread layoff notices to its workforce this summer.

Over the past few weeks, those reductions have centred on deep cuts to its hardware development and manufacturing business as it puts a lower priority on smartphone development, according to two sources who were familiar with the cuts.

Some of those employees have been told they will lose their jobs in November, one of the sources close to the matter said.

But the issue of further reductions wasn’t addressed in Friday’s press release or the analyst call.

The sources both say hundreds of additional jobs have been quietly shed over the summer, affecting software development jobs in Ottawa, manufacturing in Cambridge, Ont., and BlackBerry headquarters in Waterloo.

Chen told reporters at a media roundtable that it’s “hard to determine” exactly how many employees have been laid off because the figures are complicated by recent hirings in certain divisions and the acquisition of other technology companies.

“I’m sure there will come up with a net reduction of some sort, but it’s not going to be that big,” he said, declining to get more specific.

He noted that when factoring in recent hires BlackBerry has about 3,000 employees across all of its Canadian operations, which is about 500 fewer workers than a year ago.

Just Posted

Red Deer ranked 10th most dangerous place in Canada

Red Deer is the 10th most dangerous place in Canada, rankings by… Continue reading

Grain shippers worried about strike as feds urge CN and union to continue talks

MONTREAL — Grain shippers are concerned about the impact of a strike… Continue reading

A lesson in excellence and success

Mary Kemmis, president of the Prairie Division of Black Press Media, and… Continue reading

More flurries expected Tuesday evening in Red Deer

It’s snowing in Red Deer. Snow began earlier this morning and is… Continue reading

Trans Mountain received $320M in government subsidies in first half 2019: report

VANCOUVER — The Trans Mountain pipeline received $320 million in subsidies from… Continue reading

Central Albertans help families during holidays with Christmas Wish Breakfast

It takes a community to help a community. And Sunday morning at… Continue reading

Your community calendar

Nov. 19 The Mountview Sunnybrook Community Association will hold its AGM at… Continue reading

University of Calgary to slash payroll after post-secondary funding cuts

The government is also cutting all funding for the Infrastructure Maintenance Program

Opinion: Climbing cost of drinking water a drain on low-income earners

Environmentalists and water economists have long argued Canadian households have not conserved… Continue reading

U.S. support for Israeli settlements is no surprise

As British newspaper magnate Viscount Northcliffe said: “When a dog bites a… Continue reading

Opinion: The buck stops with Red Deer city council

Red Deer city council has taken measures to distance itself from decisions… Continue reading

Denis Shapovalov, Vasek Pospisil give Canada Davis Cup win over favoured Italy

MADRID — Denis Shapovalov and Vasek Pospisil kept rolling on Monday, notching… Continue reading

Canadian women’s star Hayley Wickenheiser inducted into Hockey Hall of Fame

TORONTO — Hayley Wickenheiser hasn’t had a lot of time to reflect.… Continue reading

Federal Court orders Canada’s ISPs to block piracy website for first time

TORONTO — A Federal Court is ordering Canada’s internet service providers to… Continue reading

Most Read