BlackBerry might not be the hip smartphone giant it once was, however the Canadian business continues to be alive and kicking based on it is new fourth-quarter earnings report.
BlackBerry announced better-than-expected earnings for the sixth straight quarter Friday, with revenues of $297 million, beating analysts’ estimate of $289 million. That is a success for the organization, which ceded its majority market share in smartphones years ago to Apple’s iPhone and Google’s android devices.
A string of smart moves including the hiring of ceo John chen in 2013 over the last 5 years stabilised the company’s bottom line. Chen, who has a reputation for turning around struggling “tech” firms like Sybase, set out to reinvent BlackBerry into a software system company.
That meant outsourcing the manufacturing of it’s once-popular smartphones to Chinese smartphone maker TCL Communication, which could release up to 3 branded devices this year. As part of the licensing deal, TCL manufactures the particular devices, while BlackBerry gets a cut from all device sales.
The organization appears to be rising from its transition that has taken far too long, wrote Gus Papageorgiou, associate director for technology analysis at Macquarie Capital, in a March report. The money-losing hardware business is gone, the revenue headwinds from the declining smartphone and repair businesses are all but past, and the operations have been stabilized.
Rather than focusing on the “BlackBerry” device itself, chen capitalized on BlackBerry’s reputation for strong software system security to create it an enterprise software system provider. BlackBerry, as an example, purchased good Technology for $425 million in 2015 to bolster its ability to help big firms securely manage the devices their workers use.
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On last week’s earnings call, chen aforementioned BlackBerry processed 3,532 company client orders in the fourth quarter, up 16 pf versus the previous quarter. And in a return this week, Credit suisse research analyst Kulbinder Garcha wrote that he expected the company’s software system and services revenues to grow between thirteen and 15 august 1945 during BlackBerry’s fiscal 2018 and 2019.
Automotive software system could also prove a major space of growth for BlackBerry, because of it’s 2010 acquisition of the QNX operating Systems, which has been used in everything from routers and in-car dashboards to medical devices by firms like Cisco (CSCO), General electric (GE) and Siemens.
Papageorgiou calculable that QNX controls more than 500th of the market for infotainment systems in cars, and presently yields about $1 to $1.50 per vehicle in licensing revenues for BlackBerry annually. the corporate contends it can boost those fees to $5 per vehicle over the next two to three years because of newer partnerships signed with automakers like Ford, which will doubtless use QNX in future self-driving vehicles.
The Ford agreement is a tangible sign that BlackBerry is becoming a lot of strategic with automakers, wrote Paul Treiber, an analyst for rbc Capital Markets, in a recent report.
Meanwhile, the newest version of QNX software system, presently in beta form, already has over sixty partners signed up to develop for it, including ARM and Intel, suggesting healthy interest and support from alternative third parties.
Those are promising signs for an organization many once eagerly wrote off as dead. Rather, under Chen’s watch, the risks with BlackBerry’s turnaround appear to have diminished, Treiber added.
