BlackBerry hit by worse-than-expected sales

http://www.theguardian.com/technology/2014/dec/19/blackberry-autumn-quarter-results

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BlackBerry shares fell on Friday despite the smartphone maker announcing better-than-expected orders for the new Passport phone, as well as slashing losses.

The Canadian company lost $148m (£95m) for the three months to 29 November, a dramatic turnaround from the $4.4bn loss for the same period a year earlier.

However, sales were $793m – significantly below analysts’ expectations of $927.8m and almost $400m lower than last year.

In September BlackBerry launched the Passport – an unconventional smartphone about the size of a closed passport with a large square touchscreen as well as a keyboard.

John Chen, chief executive, said the flagship model sold out “a number of times in the quarter”, creating a backlog of orders that reduced revenue in the period.

While some 200,000 Passports were sold, he said that some orders slipped into the fourth quarter. It is now available in the UK for about £460 unlocked on a network or from £28 a month on contract with a network such as O2.

Chen said recently: “BlackBerry has survived; now we have to start looking at growth.”

Shares fell 5% to $9.57 in New York, valuing the company at $5bn. The stock has risen more than 25% this year as fears that BlackBerry could go under abated.

Chen, who took over in late 2013, set a goal of selling 10m phones a year – just a quarter of the number of iPhones sold by Apple in three months.

This week BlackBerry launched the Classic, essentially the Bold in a different case, which has the traditional keyboard beloved of many BlackBerry users despite the wholesale move to touchscreens on almost all smartphones.

The company hopes its core business user customer base will embrace the Classic, with the new device.

BlackBerry now accounts for only a small fraction of US smartphone sales after controlling almost half the market as recently as 2009. It is still making handsets despite trying to become an enterprise security and consumer software business.

It said that 46% of revenues came from hardware, with another 46% from services. Software and other revenue accounted for 8%.