BlackBerry crumble stops abruptly as smartphone sales bounce

By Graeme Burton
18 Aug 2014 View Comments
Blackberry CEO John Chen shows off Passport and Classic handsets. Image via Crackberry

Troubled smartphone manufacturer BlackBerry experienced an unexpected bounce in sales in its second quarter, growing sequentially from the first quarter by 15 per cent.

The company shipped 1.5 million units, according to analysts and box counters IDC, which compared with 1.3 million in the first quarter. The increase in sales might be attributable to the successful launch of the Z3 smartphone, a device designed and made specifically for the Indonesian market where BlackBerry remains popular.

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The Z3 is based on the company's new QNX-based BlackBerry 10 operating system, but has been designed to appeal to a lower price point than the Q5, Q10 and Z30 that comprise the mainstay of the company's sales in the UK and Europe.

Nevertheless, the positive spin that could be put on the sales increase cannot disguise that the company's smartphone sales are still down by 78 per cent in the second quarter compared with the same period a year earlier – after a catastrophic collapse at the hands of the company's previous management.

Since the November 2013 arrival of John Chen – formerly of Pyramid Technology, Siemens Pyramid and database company Sybase – the company has completed a no-nonsense cost-cutting exercise and sought to focus on the company's core strengths: its security and enterprise software.

Chen has also cut a risk-sharing agreement with outsourced manufacturer Foxconn, which will also see Foxconn benefit financially if the company successfully turns around.

The company will release some radical new devices before the end of the year – the ultra-wide Passport and the keyboard-toting Classic – in a bid to capture smartphone buyers' imagination, while also appealing to the company's core of business- and communication-focused users.

In the final part of BlackBerry's turnaround plan, Chen says the company will begin hiring the staff it needs in order to be able to focus on the areas he has identified for future growth.

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