BlackBerry Shipments Rise From Prior Quarter Under Chen

Aug 15, 2014 5:40 pm ET

(Updates closing share price in sixth paragraph.)

Aug. 15 (Bloomberg) -- BlackBerry Ltd.’s smartphone shipments grew 15 percent in the second quarter from the previous three months, recording their first sequential gain in a year as Chief Executive Officer John Chen’s turnaround plan takes hold.

BlackBerry shipped 1.5 million units, research firm IDC said in a statement, compared with 1.3 million in the first quarter. The company’s share of the global smartphone market held steady at 0.5 percent as the overall market grew, IDC said.

Under Chen, BlackBerry has shifted its focus from consumer phones to selling software-based services to businesses and governments. Still, he has remained committed to selling devices in key markets, reintroducing the keyboard-equipped Bold in March for business-user loyalists and debuting the Z3 in May in Indonesia, where BlackBerrys remain popular.

“Regardless of what you may think, there’s still a loyal following among some, certainly on the enterprise side,” said Richard Tse, a Toronto-based analyst with Cormark Securities.

The company’s smartphone business is still much diminished, with shipments down 78 percent in the second quarter from a year earlier, according to IDC. Waterloo, Ontario-based BlackBerry hasn’t increased its market share since the third quarter of 2009, Ramon Llamas, an analyst with IDC, said in an e-mail.

BlackBerry rose 1 percent to $9.59 at the close in New York. The shares have risen 29 percent this year.

BlackBerry 10

BlackBerry last made a sequential gain in smartphone sales in the second quarter of 2013, the first full quarter of sales for its BlackBerry 10 operating system. Ultimately, the new software failed to lure back enough users who had already switched in droves to devices by Apple Inc. and Samsung Electronics Co. Chen was hired in November to reverse the company’s fortunes after a failed buyout.

To boost smartphone sales by appealing to business users, BlackBerry is set to release the ultrawide Passport and keyboard-equipped Classic -- an update to the Bold -- later this year. In December, the company signed a five-year deal to outsource the manufacturing of its devices to Foxconn Technology Group, an Apple supplier and the world’s largest manufacturer of electronic products.

Chen said in July he would begin hiring new employees, marking the end of a restructuring phase that eliminated about a third of the workforce.

The next step for BlackBerry is to gain traction with its mobile device-management platform, a system that helps companies administer and protect their employees’ devices, Tse said.

“If you’re looking at it from a stock perspective that’s really what you should be most focused on,” he said.