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Says BlackBerry CEO, "If we ship 10 million phones in a year, we'll be profitable on phones"

John Chen
By Kevin Michaluk on 19 Jun 2014 09:04 am EDT
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During the Q&A portion of BlackBerry's Q1 2015 earnings call, CEO John Chen answered a question which sheds some light on BlackBerry's strategy as it concerns the profitability of the BlackBerry hardware devision.

"If we ship 10 million phones in a year, we'll be profitable on phones (hardware). That's the model we're going after."

Historically, most people heard the name BlackBerry and only thought about BlackBerry as a smartphone business. When John Chen took over the reigns of the company, he wasted no time in repositioning BlackBerry to be looked at as a portfolio of four business units: handsets/hardware, enterprise (BES), messaging (BBM) and machine to machine systems (QNX/Project Ion). Under this notion, Chen also made it clear that each of these business units needs to be looked at differently as each are in a different stage (BBM is a startup, QNX is a growth opportunity, etc.) and that ultimately each unit needs to be profitable.

This statement today by Chen gives us a little more clarity as to what BlackBerry needs to keep doing in terms of handset sales to keep that division in the black. Chen has been clear that he wants to keep making BlackBerry phones, but obviously if things are not making money he's going to do whatever is necessary to make sure the company is in profitable territory. The 10 million break-even target is not an astronomical number - it should be a number BlackBerry can hit (hopefully with ease!). This should give CrackBerry Nation confidence that we'll have plenty of new hardware to salivate over down the road.

Reader comments

Says BlackBerry CEO, "If we ship 10 million phones in a year, we'll be profitable on phones"

124 Comments

Pretty sure I said 10 million phones to make money the other day.

Looks like BlackBerry will be profitable in phones...

Great quarter...

Founding Member of "Club Z30 "..... the most exclusive club in mobile

I know it made my day everyday at lunch I check Crackberry and boy it's always gloom and doom. Glad this time around everything is good in the horizon, it made my day. :)

Posted via z30 STA100-5 the only high end business device on the market

What happened to "Gold Stars"?

Ms. Obama would not approve of the cookies, just saying.

Murray Squire Marr

The 10 million number is not as easy as you think.
This quarter BlackBerry sold only 2.6 million.
Can BlackBerry maintain that rate for the next three quarters?
Don't forget that the selling rate of BBOS is rapidly decreasing

Posted via CB10

I would multiply 2.6 by four if you are sure they would sell not less than 2.5 million each quarter.
The hardware is still in free fall.
I doubt BlackBerry could sell 10 million handset by the end of this fiscal year.

Posted via CB10

....... everyone needs a passport. Yes BBRY marketing can use my coined phrase freely in their ad campaigns, no royalties needed.

Posted via CB10

In North America, there is a place for a high end, high spec, secure BlackBerry smartphone.

Posted via CB10

Why not...it suits an all-touch like the Manitoba. Tall glass building -> tall phone with glass front.

If "that" happened would buy one and stop nitpicking everything BlackBerry does?

If that was the case then I would want BlackBerry to make you a one-off Android phone so you could "Don't Worry...Be Happy".

Murray Squire Marr

There would be no such thing as a secure blackberry android phone. It is Google's business model to know everything about everybody. Any licensing agreement would reflect that and everything you do with your phone would be shared with Google.

Besides, in my opinion, OS10 is better than Android and gets better with every release.

Posted via CB10

You're right on that one. Android is a GOOgle phone. And their business model is obvious.

Not sure, but I have a suspicion Google snooping starts right at the OS kernel level....

"No Q10?" -> "Buy from Chen... "

No just an android phone. It's actual name is the Black phone and will be released by silent circle. Look it up. Most secure consumer device hands down.

Posted via CrackBerry App

so 10 mil per year

right now they're just over 1 mil / quarter. 4 mil/year

it shouldn't be too hard to double they're sales considering the amount of legacy devices out there and growth in markets like india.

i'd guess the handset business becomes profitable in 2 years. 6-8 quarters. maybe sooner if they roll out some marketing once 10.3 comes out.

Fact is it IS hard for BlackBerry this us what troubled me. It's been more than 2yrs since such number has been hit in one year by BlackBerry.

Posted using CB10 via my Z30 Dark Knight!

I made a comment a couple of weeks ago that they would be profitable selling around the ten million number don't remember if I was north or south of that mark.

With their focus on the enterprise, qnx and the internet of things- selling a loot of phones is no longer necessary to keep them in the Black. The truth of the matter before Apple sold crazy numbers of phones, two to three million phones a quarter was a good quarter.

It's worth noting that in the quarter just reported on, 2.6m phones were sold to end users, although revenue was recognised on only 1.6m. So for all intents and purposes BlackBerry is already selling enough phones for the handsets business to achieve profit moving forward.

Posted via CB10

They now only recognise revenue on phones that have been sold through to the end user. Previously they recognised revenue when the phones shipped to carriers, wholesalers, retailers. They changed last year. I would assume Chen means shipped to end user. Sent BlackBerry is now selling online this is the only metric that would make sense.

Posted via CB10

Not really, since the numbers have been dropping steadily each quarter and the number of bb10 phones has been around 1.1 million.

They need to get the 1.1 up to 2.5 million per quarter, as BBOS drops off.

Posted via CB10

If Chen wants that, he needs to market the hell outta the classic, passport, Z3 and Z50. All I ever see is commercials for Iphones and HTC, but never ever Blackberry.

Posted via CB10

Not really... Chen is focused mainly on one thing: Enterprise. Consumer marketing will do next to nothing to boast that number and in turn be a HUGE cash burn for the company. Despite have $3.1B in the bank they can't sustain the marketing required to increase their sale through numbers.

JC is quite clear in the direction that the company is currently going. Enterprise first, consumer second. Vice Apple, Samsung, HTC etc who are predominately consumer based companies. Hence why the Amazon deal is a good deal and makes sense. It gives consumers access to the Apps and then releases the company's resources to produce quality native enterprise apps.

Overall, BB can achieve the 10M sales with the increase in enterprise sales and a small percentage of consumer sales.

There won't be any advertising until 10.3 arrives, and the Amazon deal/partnership is up and running. Why advertise a half baked situation. After the road map is set, you will see a new BlackBerry marketing campaign.

Posted via CB10

I don't see a successful advertising until the US market has received the 10.3 update. If it is released world wide and delayed in the US then it will be another case of the US being in the dark relating to BB. They need to have a successful campaign when the Amazon apps are available to consumers and not when it is stated that you have to wait one or more months for it to be available in the usa

I can't even imagine holding a phone in my hand that isn't Blackberry. The thought of that makes me cringe. I hope just hope they start to unveil a new premium phone every 18 months. They may have to in order to sell 10 mil a year.

Next BBM update....BBM Peek

Sorry Kevin, but John Chen took over the "reins" of the company, not the "reigns".

Posted with my Q10, SQN100-2, 10.2.1.2947/2274 Radio

The key is that they don't make too many.

Build a couple million, sell a couple million, build a couple million, sell a couple, rinse and repeat.

Don't get into the mindset that a device (any device) is a savior and build 15 million.

But any word on advertising strategy. It still kills me that I see nothing of the z30. Rarely is it front and centre on any shelf. I really like mine... the best BlackBerry I have had, yet it's nowhere? why is this?

Posted via CB10

10 mil a year should be EASY if they would lauch Z3 in east asia ASAP.

like - 10 million - is an average town in China/India :)
like0.5% of total population of both countries :)

sooooo why not?

Is that 10 million total or per device, the number of different devices will obviously effect this number.

Z30 on 10.2.1 in Canada

Eeeeeeeeeverybodys got a BlackBerry here in Ottawa. Yeah yeah I know, all Gov workers, but it's nice to see regardless.

Posted via CB10

I see them occasionally... don't pretend they outnumber Samsung or iPhone.

Too bad Canada doesn't have more influence on the US in terms of phones I always flash my phone without a case when I'm there to show it off.

Posted via CB10

Very doable. 7 billion peeps on the rock

Makes money at 10M. Considering lower share for BlackBerry on the Foxconn products this is pretty good.

That would be 30+M active users, now 50

Best news finally more bb10 that bbos.

Also, doesn't include Z3.

HTC TOUCH, Nokia-N97, BlackBerry Torch 9800, Z10

I know john Chen can do it.. but he also need our help to make profitable BlackBerry again. We know that BlackBerry lacks of advertisement right? We can help them by means of sharing our experiences by using our BlackBerry 10 devices and tell to our friends, relatives and love ones.. if all do that, if we can do that, our beloved BlackBerry will rise again :-)

Powered by Q10 Philippines :-)

I concur with the sentiment... BUT Where is the 10 in BlackBerry 10?

BlackBerry symbol to the power of 10 ©

It's not on the devices or in the start up sequence.

Furthermore why not name each update after a chemical in the Periodic Table? ©

Or colours in the Spectrum? ©

Posted via CB10

Just a thought, how many BBM users are on BlackBerry? For some reason I want to say 40M+. If they can build the phones to get 50% of them to upgrade every 2 years wouldn't that equal 20M/year? Sounds like an easy deal to me. If they can gain a little market share with some advertising of 10.3 and Amazon, they could easily do 25-30M/year.

They have to wait for 10.3 and the Amazon deal.....then advertise. they can't afford to sell the near future now. That would be suicide. Get 10.3 up and running, get the Amazon Store baked in, then advertise. I see people complaining they can't find the amazon store already! We don't have 10.3 yet!

Posted via CB10

+10 you have point :-) with the new 10.3 os and amazon and new BlackBerry devices + advisement = 10m or more than sales

Powered by Q10 Philippines :-)

Funny you say that because just the other day I was telling somebody how great bb10 is and what you could do with it. She has a Curve and said she has never heard of bb10. Then she said they need to have commercials telling people this.... so there you have it.... a BlackBerry Curve user that doesn't even know bb10 exists a year after launch....... (well she knows now).

Posted via CB10

+1 for you.. BlackBerry truly need ads more ads for BlackBerry 10, now they Passport,Classic and Z3. I hope they show it to the world.

Powered by Q10 Philippines :-)

With the Asia, South Asia and African countries selling Z3's that should easily cover 7 million phones, considering the populations! 3M rest of world should be fine.

Posted via CB10

10Million is a fair target. Actually current pace if we refer to actual Q numbers.
Expectations at their proper levels. Perfect.

JC priced z3 at ~ 220$ in my country which is not very competitive compared to other low tier Android in term of specs. I know specs could not say shit but the majority buys phones as they buy the specs.
BB needs a better pricing strategy if they want to hit the 10M marks
Android app experience also needs to be improved. Even z30 lag as shit when running Android, what guarantee z3 doesnt? Pick some of the best android app in bb10 and advertise the shit out of them.
In my country, consumers are bombarded with Ss, nokia ads but never seen a BB's

Posted via CB10

Well, z3 will have MUCH better performance than AnY low end android

Posted via CB10 on glorious Z10 powered by 10.2.1.3175

If You will continue making mobiles like the new "Passport" you will not sell any.

The "Passport" will bring blackberry More down, what are you doing guys!!!!

We are waiting for something new and cool, and you bring this one!!!!

Posted via CB10

BB needs to make a all-touch flagship phone that AT&T carries before April next year, (when my 2 year refresh cycle occurs) and I'll be happy.

U should look outside ur area,,,about the BlackBerry conditions in India and the services provided to BlackBerry users... :(
U r launching new and new devices, ,,but not looking at services and problems of users....:(

@dazlr

Here, i am patiently eaiting for the all touch high specs Z30 successor..My money will be yours BlackBerry when you release it.

From my  phone

Please... please....start marketing now..dont fall asleep...because in the end that's the only way to get the word out. idk how marketing is in other countries but you definitely need to work at it here in North America where your losing to the popular iOS and Android devices. But so far I'm excited at the new strategy and devices that have been revealed so far :-) #GoTeamBlackberry!!!!!!

Posted via CB10

Dear Mr. Chen please launch Ontario Asap. It will be a instant hit. Z30 has been very successful device and Ontario shall take your sales to the next level.

Posted via CB10

They sold like 1m less this quarter, I don't call that progress.

Chen can keep on wishing but the growth problem remains.

Thor put all its chips on consumer and got burned, while Chen putting most of his chips on enterprise.

We'll see if gains any traction.

Posted via CB10

I'm a bit disappointed. That is an unambitious goal and anyway it will hard to reach by doing things the old way, actually by not doing anything better. Such a figure does not imply any improvement over the existing situation nor changes in marketing, etc.

An even greater disappointment comes from the today's "presentation" of the Classic and Passport devices. Who advises Chen, who at BlackBerry knows anything about sales? I can't understand the excitement since no details about the devices are available.

I like BlackBerry, but give me concrete data and a reason to believe in improvements.

Posted via CB10

With the coming of Z3, Classic and Passport....i bet and believe that blackberry will hit a 5-6 million unit sales next year. watch out people!!!

Posted via CB10

If the sales each quarter increase, that will eventually reach the 10 million mark within a year.

Posted via CrackBerry 10 (CB10) application using my BlackBerry Q10.

Why not make a phone without the BES option?Most consumers don't do the BES then they would be cheaper.

Posted via CB10

Hi Kevin
Do you have reports on BlackBerry sells by country?
The other day I was browsing through french mobile phone provider and was surprise and disappointed to discover a clear lack of BlackBerry in their stores, barely few Q10 discounted, no Zx and few os7 BlackBerry phones.
Not anymore a surprise for me to feel to be a privileged guys by owning a BlackBerry Z10. So far in Paris managed to spot only one Z10 and one Q5. On the business métro line...
I wonder if this biais toward other phones is the same in all countries (I would be it us not the case in the UK).
Any idea if BlackBerry's CEO has a master plan to boost availability of BlackBerry phones across all countries, even if personal usage is not really their market I wonder how companies could be push to use new BlackBerry phones instead of iPhone or others if their are not distributed by phones companies.
Please feel free to share your thoughts on this.

Kind regards
Kal

Posted via CB10