BlackBerry CEO plans to stop losses at smartphone phone business this fiscal year

TORONTO – BlackBerry CEO John Chen says the company will aim to make its smartphone business profitable this fiscal year.

Chen wouldn’t peg BlackBerry’s future to the success of its devices but says there’s a plan to cut losses as it moves to the growth phase of its turnaround plan.

He told BlackBerry’s annual shareholders meeting in Waterloo, Ont., that the No. 1 objective for the 2017 financial year will be to “get the device business profitable.”

Chen told shareholders that BlackBerry’s first Android-powered phone, the Priv, is not moving as quickly as hoped.

The one-time leader of the smartphone industry reports its results for the first quarter of fiscal 2017 on Thursday.

Analysts expect BlackBerry to report a loss and will likely look for evidence of how the Priv has been selling.

The company sold 600,000 phones, including the Priv, during its last quarter of fiscal 2016 — a drop of about 100,000 from the previous reporting period. Chen partly blamed these lacklustre sales at the time on lengthy contract negotiations that delayed a distribution deal with Verizon Wireless.

In late April, the company hired a new senior vice-president of global device sales to help accelerate the sales of its devices.

“The handset business is intensely competitive,” Chen said Wednesday. “We’re kind of coming back from behind.”

Still, the CEO believes BlackBerry can start to turn a profit from its hardware business. He’s previously said the company will stop making smartphones if it can’t achieve this.

Despite the focus on smartphones, Chen said “I personally do not believe devices is going to be the future of any company.”

Instead, Chen says the future lies in what runs on, connects and improves these devices.

“This is why we do have a cross-platform strategy.”

The company’s software and services operations have performed better, with revenue in the category jumping 106 per cent last quarter compared with the same quarter the previous year.

BlackBerry is aiming to grow its software business by about 30 per cent this fiscal year, Chen said.

Sixteen analysts surveyed by Thomson Reuters estimated on average that BlackBerry, which reports in U.S. currency, will likely report a loss of US$27 million after adjustments — or about seven U.S. cents a share — for the quarter.

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