As BlackBerry shifts its business from smartphones to software, the company’s chief executive says sales of higher-priced devices are slowing down.
“The high-end phone market is softer than most other parts,” CEO John Chen told BNN in an interview.
In its latest quarter, BlackBerry recognized revenue on approximately 500,000 devices. That’s down from more than one million devices in the same period last year, and more than 13 million devices in the same period in 2012.
As that business continues to struggle, BlackBerry is beefing up the portion of its business focused on selling software to business customers. It also unveiled a new unit, which will license device software to rival phone-makers. “It could be our competitors in the space…an LG, HTC, Sony or Samsung,” Chen said.
As BlackBerry’s software business grows, Chen expects the company will continue hiring sales and customer support staff in cities including Waterloo, Toronto, Ottawa and Vancouver.
Chen’s comments on smartphone sales highlight Apple’s recent struggles. While Apple remains the dominant high-end smartphone seller, its sales of iPhones declined 16 per cent in the most recent quarter, compared to the same period last year.
“You can’t just make yet another rectangular-shaped something,” Chen told BNN in an interview. “You now need something more capability-wise and feature-wise for the next generation for the replacement cycle to come back sooner.”
While BlackBerry is primarily focusing on its software business, it continues to service its die-hard customers. “We have roughly 25 to 30 million users on our network that are using BlackBerry phones,” said Chen. He says most of those customers are governments in North America, Europe and Australia, while Wall Street and Bay Street remain strong customers. “In the investment banking world, a lot of them are still very committed to BlackBerry.”