BlackBerry CEO John Chen is executing on his plan to leverage the company’s security software expertise, even as the Canadian company’s smartphone sales stagnate.
A 153% surge in software revenue during the most recent quarter was not enough to restore BlackBerry to profitability, but it does show that the company is making good on Chen’s pledge to make the most of BlackBerry’s security software.
BlackBerry was a smartphone pioneer, largely because it offered enterprise customers a highly secure solution for mobile e-mail and document sharing. The company suffered double setbacks as Apple launched the iPhone and Microsoft beefed up the security on its Microsoft Exchange servers.
Chen, who is credited with turning around software company Sybase, has tried to double down on security software while keeping BlackBerry in the smartphone game. The first initiative has been more successful than the second. With $137 million in software revenue for its first fiscal quarter, BlackBerry is on track to hit Chen’s goal of $500 million in annual software sales.
Within the last year, BlackBerry has purchased three software companies. Movirtu makes virtual SIM cards, Secusmart makes high-end mobile security solutions, and WatchDox specializes in secure file sharing for enterprise customers.
Meanwhile smartphone sales continue to languish. Revenue fell to roughly $263 million, down from $379 million last year. Although a number of loyal users are holding on to their tried-and-true BlackBerries, the company’s new BlackBerry Classic has not been a runaway success. Overall, BlackBerry has less than 1% of the smartphone market, according to Gartner.
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