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BlackBerry posts huge quarterly loss

Friday, December 20 15:31:48

BlackBerry, which gave up on a plan to sell itself last month, reported a massive quarterly loss on Friday, as sales of its smartphones shrivelled and it booked asset impairment charges and inventory writedowns.

The company, which announced a five-year partnership with Foxconn Technology Co Ltd to develop and manufacture a handset for Indonesia and other emerging markets, conceded that its biggest challenge was still in its core handset business.

"While our enterprise services, messaging and QNX embedded businesses are already well-positioned ... the most immediate challenge for the company is how to transition the devices operations to a more profitable business model," said John Chen, who last month was named chief executive officer.

Chen has said he will not jettison the hardware operation and is counting on strong growth in its service business that manages smartphone traffic on the internal networks of corporate and government clients.

BlackBerry sold about 4.3 million handsets in the third quarter ended Nov. 30, including some shipped to suppliers earlier. Older BlackBerry 7 models account for about 3.2 million of the smartphones.

The company recognised hardware revenue on 1.9 million devices, down from 3.7 million in the prior quarter.

BlackBerry's cash pile grew to $3.2 billion from $2.6 billion a quarter earlier, but that included $1 billion raised by issuing convertible notes to a group of investors last month.

The Waterloo, Ontario-based company pioneered the concept of on-the-go email, and for years its pagers and phones were must-have devices for political and business leaders. But in recent years it has ceded its once-dominant market share to Apple Inc's iPhone and a slew of smartphones powered by Google Inc's Android operating system.

A new line of devices that run on BlackBerry 10 software has failed to gain traction, prompting the company to put itself up for sale earlier this year.