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BlackBerry Passport sells out; CEO foresees profitability in 2015

Matt Hamblen | Sept. 29, 2014
Chen says banks and government are coming back to BlackBerry.

blackberry passport primary 2
BlackBerry said its Passport smartphone, which went on sale Wednesday, has sold out on its website and on Amazon.com Credit: Brian Sacco

BlackBerry's new qwerty Passport smartphone quickly sold out just hours after going on sale online Wednesday, with another 200,000 back orders waiting in line, BlackBerry CEO John Chen announced in an earnings call today.

Chen didn't indicate how many units were sold online, but said ShopBlackBerry.com sold out the Passport in six hours, with Amazon.com selling iout in 10 hours before customers began leaving online orders that had reached 200,000 as of early today. The device has a price tag of $599 unlocked.

"That's extremely good receptivity" for Passport, Chen said.

But that wasn't Chen's only good news in what he called a "very solid" second quarter that ended Aug. 30 with an earnings loss of $11 million, or 2 cents per share, compared to an 11-cent per share loss the previous quarter. Still, revenues were $916 million for the quarter, down from $966 million in the previous quarter, and well below the $1.5 billion reported for the same quarter a year ago.

Chen predicted profitability for BlackBerry by mid-year 2015, possibly in the first fiscal 2016 quarter that starts in March 2015. "You can see a progressively good trend going forward," Chen said.

Chen said that large companies, especially in banking and government, are coming back to BlackBerry for its smartphones and BlackBerry Enterprise Server 10 software for security and management. They are coming for "stability," he said.

"The product is broader and deeper and has history with most customers," Chen added. "I have spoken to many executives and people are very interested in working with us. Our technology works and works well. Governments use it and major banks use it. We're winning them back -- knock on wood, I don't want to be overconfident -- and we're starting to see that with very big companies."

He also predicted more interest in BlackBerry once it launches its next operating system, BlackBerry 12, on Nov. 13 at an event in San Francisco.

The company posted a number of successes, including what it called a "normalized" use of cash of $36 million in the recent quarter, compared to $255 million in the prior quarter.

BlackBerry launched its EZ Pass program in March to provide a free, single mobile device management software platform for companies to work with BlackBerry, iOS and Android devices. Chen said the program resulted in 3.4 million licenses issued for BES 10, nearly three times the increase from the prior quarter. Of the 3.4 million, 840,000 were traded in from competitors' MDM platforms, such as Good, Mobile Iron and Airwatch.

 

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