BlackBerry Priv sold well last quarter, says CEO Chen

23 Dec 2015 | Author: | No comments yet »

BlackBerry CEO Hints to Second High-End Android Smartphone in 2016.

First shown at the 2015 Mobile World Congress back in March, it created quite a commotion even though no actual information was provided beyond a quick peek at a slider device.The BlackBerry Priv was another one of the struggling Canadian company’s big gambles from earlier this year, as CEO John Chen continues to save the firm from the doldrums, if not restore its old glory, which, we’d say, is virtually impossible at this point.

Analysts’ estimates have been beaten up after when BlackBerry Ltd. announced its latest Q results – the company has shown progress in its strategy to widen up in terms of services sale and software.Blackberry, the company credited to be the pioneer of the smartphone technology much before the concept of Android was even thought of, had been going through a rough couple of years lately.BlackBerry Limited (NASDAQ: BBRY; TSX: BB), a global leader in mobile communications, announced today that PRIV™ by BlackBerry®, the first-ever BlackBerry smartphone powered by Android™ is expected to be available in the UAE early…

However, there was no information whatsoever regarding BlackBerry PRIV sales since the smartphone was launched on the market in early November and there was not enough time for these sales to accrue. FRIDAY: The net loss as per company’s claims is US$ 89 million (17 cents/share) – in the fiscal 3Q ended on November 28 in comparison to last year’s record of US$ 148 million (28 cents).

BlackBerry PRIV is only available in four countries at the moment, but the Canadian company plans to launch the smartphone in 31 regions in the next three months, which will certainly boost its sales. The latest results comprised of various items like pretax charges of US$ 38 million for restructuring and acquisition costs and amortization of intangibles of US$ 18 million. Combining the best of BlackBerry’s productivity, security and privacy features with the wide world of Google Play™ store apps, PRIV is the epitome of form and function. We at TheREM covered this story back in October, when the company said that they ‘might’ be shutting down the business if revenue continues to fall for them. Basically, this means that BlackBerry might take into consideration a slightly cheaper Android smartphone for next year, thus avoiding competition with flagship smartphones from Samsung, LG, HTC or Motorola.

That’s 11.8 percent more revenue than the previous quarter, and the first time since 2013 that the company reported two straight quarterly increases in revenue. Of course, what everyone really wants to know is how the BlackBerry Priv, the company’s newest smartphone and its first foray into the Android universe, has sold in its first month. “The initial 30 days of sales has been quite positive,” said John Chen, BlackBerry’s CEO. “I don’t want to overhype things.

But first, a word of warning for die-hard BlackBerry fans: the PRIV is very different from BB10 devices, trying to see it as one will only lead to disappointment. As for an insight in revenue, the rate depicted US$548 million – approx. 31% down from a year earlier – but still it came ahead of what was forecasted. It’s an expensive phone.” While Chen wouldn’t give hard numbers, the company did reveal that it sold 700,000 handsets during its latest quarter. The company may break even in the current quarter, but this could be complicated by investments being made toward growing both software and hardware sales, said chief executive John Chen, who sees a return to sustainable profitability in fiscal 2017, which begins March 1.

The next Android handset launched by BlackBerry should provide the same level of privacy and security as the PRIV, or else it might not be so popular among consumers. BlackBerry has staked its turnaround on software and more aggressively licensing its trove of patents after its once-dominant handsets conceded the consumer smartphone market. “BlackBerry hit a software number that investors have been looking for them to hit for quite some time,” said Morningstar analyst Brian Colello. “I think the investment in security, in software, is the right move.” The better-than-expected results were driven by a sharp jump in software and patent licensing revenues and a higher average selling price for phones, driven by the PRIV. “We’re planning on other Android phones, but it all hinges on how we do with the PRIV,” said Chen at a media roundtable, adding the PRIV will be hitting over 30 countries this quarter. From the familiar logo at the top to the grippy material on the back and the stowed-away physical keyboard, there’s an elegant mix of black and silver elements that practically screams I’m a BlackBerry (in the most polite manner possible, of course). Speaking to Bloomberg, John Chen confirmed that he would love his company to work on self-driving car technology with major players in the market like Apple, Google and Tesla. That’s a couple hundred thousand phones less than what some analysts forecasted, and a hundred thousand less than the number of phones it sold in the prior quarter.

He is focusing on new mobile device-management software, new smartphones like BlackBerry’s first ever Android-powered device and acquisitions to generate better revenue rate. “To sustain our current direction, we are stepping up investments to drive continued software growth and the additional Priv launches. John Chen, the CEO of Blackberry, who has maintained a positive mindset throughout the troubled times was quite relieved and he predicted that he sees a sustained profitability starting 1st of March, 2017. Take the speaker grille, for example: it occupies the entire width of the device’s bottom part even though the actual speaker is just 1/3 of that and is positioned to the left. Blackberry has surprised the analysts as they were expecting it to post a loss of $489 Million, which is basically 14 cents a share, but the company surprised them by posting a loss of $15 Million, which amounts to just 3 cents a share.

Software revenue more than doubled in the quarter, putting BlackBerry within striking range of its $500 million target for the fiscal year ending Feb. 29, 2016. Chen was almost as cagey when he was asked about how his turnaround schemes have been faring so far. “My first goal is to get us into a break-even position with the device business, because you really couldn’t do anything strategically with a business that continues to lose money,” he said. “We’re in that ballpark now.” Still, considering there’s an entire sliding mechanism and keyboard in there, it is rather impressive, especially if you look at how slim the display part is once you slide it up. I’ll say it loud and clear: the build quality is lacking for a device that’s considered BlackBerry’s current flagship (and has the price tag to prove it). Keep in mind that the PRIV claimed that crown from the Passport, which fared significantly better in this respect, especially in its second “Silver Edition” incarnation called.

Because of that, the PRIV’s creaky sides and slightly wobbly screen (when slid up) were a total surprise, not to mention the flexible back side that has a visible give when pushed. Out of three PRIV units, all exhibited these “symptoms”, but one of them (model STV100-3) is creakier than the other two (model STV100-1), which indicates that in addition to being rather disappointing, build quality also varies between devices. Other things aren’t as great, like the Qualcomm Snapdragon 808 SoC you’ll typically find in mid-range devices like the Xiaomi Mi 4c or the more recent LG Nexus 5X.

Scan the table below (or check the screenshots) for a comparison between the PRIV, two flagships (Samsung Galaxy Note 5 and Galaxy S6 edge+) and two mid-rangers (LG Nexus 5X and Xiaomi RedMi Note 2). Lesson learned: Unlike the other benchmarked devices, the PRIV enforces Android’s “encrypted device” feature out of the box, which takes its toll on overall performance. This also happens every time the screen is on for longer periods of time (say you’re watching a video or catching up with the news for 15 minutes or so). There’s a bit of a sluggish feel while moving through the homescreens, menus and settings as well as opening up apps but it’s partially due to user interface animations. Coupled with the apps update that followed two weeks later, it provided the PRIV with a much-needed vitamin shot and indicates BlackBerry intends to continue improving the device’s performance and user experience from a software standpoint.

Lesson learned: enforcing the PRIV to be an encrypted device should have prompted the choice of a faster hardware platform instead of the Qualcomm 808. Still, Android 6.0 requires device manufacturers to enable encryption by default, so once it starts hitting the big league players currently on Android 5.x, the field will be leveled. One thing’s for sure: the PRIV doesn’t need charging during every day if it’s used for 1-2 hours of voice calls, 1-2 hours of web/news browsing, emails (hundreds), listening to music, instant messaging and the occasional YouTube video. Good news on the charging side though: the PRIV supports Qualcomm’s Quick Charge 2.0 tech, which lets it charge to 60% in around 30 minutes, but there’s a catch: the charger included in the sales package is of the “slow” variety.

Getting the battery from 5% to 100% takes just a bit over two hours (2h 8min) with the included charger while a QC 2.0 one needs around one hour and a half (1h 24min). It’s basically a green line that stretches to indicate the charge level and shows the actual percentage plus an estimation of the time left until the battery is full. During testing, calls were never switched from HD to SD in the middle of the conversation, something that does still happen every now and then with other phones under the same conditions.

On the loudspeaker front, BlackBerry took a big step down and replaced the traditional stereo speakers found on the PRIV’s predecessors with a single one. Lesson learned: if seducing your favorite call-center operator hasn’t been working too well so far, the PRIV might be just the personality boost you need for a breakthrough. In real life, the keys are too small and too flat to provide a good typing experience, especially when your expectations have been set by the excellent keyboard on the Blackberry Passport. In all fairness, given the slider form factor of the PRIV, some compromises had to be made, but that doesn’t change the end result one bit: the touch-based keyboard is simply a better alternative.

There is some hope though, as the camera app was included in this month’s batch of updates and added a few features and appears to have fixed performance issues that showed up intermittently in HDR mode. The thin sliding screen, while helpful to keep the device on the slimmer side, was only able to house a 2MP digicam module (as revealed by BB staff during a reddit AMA). They hoped this move would attract Android users and, at the same time, lure back some of the BlackBerry defectors with the promise of a rich app ecosystem. The effect on device sales is still unclear, as BlackBerry avoided the subject PRIV sales numbers during their recent financial call, but the signs so far aren’t too great. The OS looks and feels like stock Android in most places, which some people might actually prefer over things like TouchWiz or Sense UI, but ultimately makes the PRIV feel like an Android with some tacked-on BB apps, instead of a full-blown BlackBerry device.

First off, you’ll notice that some homescreen icons have three dots underneath, which means that swiping up on them will display their associated widget in a pop-up fashion. This feature is called “Pop-up widgets” and can be disabled on a per-app basis or completely, should you wish to do so (long press on an empty homescreen area and tap on Settings). Activating it (just swipe towards the center of the screen) will provide quick access to four areas of interest: upcoming calendar events, unread Hub messages, entries from the Tasks app that are due today and favorite contacts.

Apart from emails, everything else that can be listed there (SMS, WhatsApp conversations, Facebook notifications and so on) is pretty much a shortcut to the actual apps. Well, small things like screenshots and images from other locations being tucked away in the app menu under “device folders” or the constant reminder (and icon overlay on each photo) that you have declined to upload all your photos to Google Drive. The same applies to file managers, but this time it’s not a question of liking/disliking the built-in app, it’s a necessity: there’s no file manager preinstalled on the PRIV, which is strange to say the least. Bottom line, the status quo isn’t great and there’s a lot to look forward to in future updates, but BlackBerry seems committed and initial results are encouraging. Furthermore, you can’t have a main lock method and a backup one, which can prove fatal if the “automatic wipe after 10 failed unlock attempts” option is enabled.

One of these leverages the monthly Android security update cycle and is supposed to be delivered OTA, but our experience showed this isn’t entirely correct when it comes to models other than STV100-1 used outside the USA, UK or Canada. Case in point, an unlocked STV100-3 device needed two more weeks and a support call in order to get the software update originally released on December 2nd. However, it is simpler than implementations like LG’s that allow for extra functionality like turning the screen off or setting secure unlock patterns (Knock Code).

This behavior ranges from reduced responsiveness to ghost taps being generated, which is clearly visible when typing something on the touch-enabled keyboard (random characters show up, trying to delete them makes things even worse). The various issues ranging from hardware (inadequate build quality, underpowered Qualcomm 808 platform, downgraded sound, weak front camera) to software (missing apps, no Blend/Link support, incomplete Hub) don’t paint a pretty picture for the PRIV. Despite what the box says, coming from a BlackBerry Passport, iPhone 6 Plus and Samsung Galaxy S6 edge+, I felt rather underPRIVileged while using the PRIV.

Updates, including those that concern security, are a problem if you’re unfortunate enough to own a non-US PRIV model (anything other than STV100-1).

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