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BlackBerry software business takes a hit

BlackBerry’s reinvention as a software company isn’t going so well.

The BlackBerry software business shrunk in the first quarter, falling short of analysts’ expectations in the process. Those results came just days after the company announced a slew of enhancements to Enterprise Mobility Suite, the cornerstone of its attempted turnaround.

Those new features will need to move the needle if BlackBerry is to remain a leader in the enterprise mobility management (EMM) market.

BlackBerry software and services sales totaled $101 million for the first quarter — a 4.7% drop compared to the same timeframe last year. And its overall software and services revenue, which also includes its emerging technology unit and licensing deals, was $169 million. That missed Wall Street’s $181 million target, according to Investor’s Business Daily.

BlackBerry seeks to differentiate

The new features coming to BlackBerry Enterprise Mobility Suite include:

  • management of Microsoft Office 365 mobile apps;
  • BlackBerry Access support for Windows 10 and Apple macOS (basically mobile application management for laptops, as Jack Madden noted);
  • some basic app analytics capabilities; and
  • support for wearable devices and applications.

These are all important additions, but none — except perhaps BlackBerry Access for laptops — is a real differentiator. BlackBerry was once again a leader in this year’s Gartner Magic Quadrant for EMM, and the company scored higher than last year in terms of its ability to execute. But its completeness of vision still trailed that of market leader VMware.

MobileIron and IBM are the other leaders in this year’s Gartner report. Citrix dropped out of the leaders quadrant.

CEO remains optimistic

Overall, BlackBerry did manage to turn a $671 million quarterly profit. But as Ars Technica’s Sean Gallagher pointed out, that’s only because Qualcomm paid the company $940 million to settle a dispute over royalties.

BlackBerry CEO John Chen attempted to paint an optimistic picture in a CNBC interview Friday, highlighting plans for growth in the machine learning and smart car markets. He also claimed that the BlackBerry software business is in fact on the rise, blaming the reported loss on how the company had to account for its acquisition of Good Technology.

“A year ago, we had revenue from the Good Technology acquisition that came off the balance sheets,” Chen said. “So if you take that off … the year-over-year growth of our enterprise business was actually 12%.”