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Why BlackBerry won't save its hardware business

Ramin Edmond
News Writer

BlackBerry’s phone business is struggling, and with a make-or-break deadline looming, history is not on the company’s side.

BlackBerry sold about 600,000 phones in the quarter ending Feb. 29, and hardware revenue was down nearly 40% for the fiscal year. Those results led CEO John Chen to say on CNBC he would “seriously consider” BlackBerry becoming a software-only company. He set a September deadline for BlackBerry’s hardware business to turn a profit before discontinuing it completely.

The chances of BlackBerry meeting this deadline are very slim, said Jack Narcotta, industry analyst at Technology Business Research in Hampton, N.H.

“It’s been a long time coming, and it shouldn’t surprise anyone,” he said.

Some experts have said BlackBerry’s first Android-powered smartphone, the Priv, could turn around the company’s faltering hardware business. Chen insisted in the TV interview that people who have bought the Priv have praised it.

That gives Chen hope for the hardware business, but the market for the privacy-focused device is not developing as fast as he would like, he said. He pegged the low sales on the device’s price of $699 and the distribution needing to “beef up a little bit.” (BlackBerry reduced the price tag Tuesday; the Priv will now cost $649 if bought directly from the company.)

On the flip side, BlackBerry’s software and services business grew to account for 32% of the company’s overall revenue. At $494 million, that is double the previous fiscal year’s software revenue.

A big boost came when BlackBerry closed its $425 million acquisition of Good Technology, a former enterprise mobility management (EMM) competitor, in November. The deal doubled BlackBerry’s EMM market share, making it the largest EMM vendor in the industry, according to the most recent IDC numbers from June 2015.

If BlackBerry ends up abandoning hardware, it will be able to focus on EMM, which is driving the company, Narcotta said.

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I thought their hardware business already died a couple of years ago, when they stop innovating their phones...
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It is steadily declining, but it is not dead yet!
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BlackBerry still makes smartphones. It didn't innovate during the few years after the iPhone came out and got left behind. In recent years, BlackBerry has tried to differentiate itself by being more enterprise friendly and more secure. Its latest phone, the Priv, is the most secure Android phone on the market, according to BlackBerry, but that hasn't done enough to turn around its phone business. 
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Comment by robert0z is symbolic of the problem...nobody knows anything about BlackBerry...not because they never innovated their phones...they've done that...but because nobody knows anything about them. Everyone is waiting for the ship to finally go under. That won't help BlackBerry sell handsets.
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Blackberry's spectacular company downfall may be attributed to its hardware's enterprise roots that Blackberry could grow away from, and the truth that everything rooted in enterprises are doomed to fail, and this truth includes such illuminaries such as HP, General Electrics and even IBM which are joined at the hips with enterprises. Look at every single company that is riding the crests of success, they are all totally disjoint from anything enterprise: Apple, Google, Microsoft, Facebook, Tesla, etc. The basic cause of Blackberry's spectacular downfall is unfortunately still the main driver of Blackberry's business - enterprise. Jim Balsillie & Mike Lazaridis gave their best shots trying to make Blackberry a consumer driven business. Unfortunately, 10 years of trying to consumerize Blackberry failed miserably leaving Blackberry stuck deeply mired in the enterprise business, no one can survive depending on the enterprise businesses. Even the USA presidency is totally dependent on the general public votes, not from enterprises sponsorships. Blackberry's rare consumer oriented devices were the BB Storms, and the BB Storm was a 100% failure as 100% of these BB Storms were returned back to Blackberry by the customers, and frankly, Blackberry never recovered from this spectacular failure.
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Anybody with enterprise connections can start up and operate a fairly successful enterprise related business, it's like Alfonso starting a business using his connections from Uncle Giuseppe. But starting and succeeding a consumer oriented business is a totally different thing, you can be God's favourite son and still fail miserably in your business.
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Apple's rises and falls are joined at the hips with consumers. Apple's current and future successes are totally dependent on how well Apple can serve the consumers. Blackberry has shown the world the results of failing to serve the consumers.
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One key reason why Blackberry is failing so miserably is the fact that consumers hate physical keyboards, and Blackberry's nonstop patronizing the physical keyboards. This is stupidity at its worst, and evidently Blackberry cannot control its urge of acting so stupidly.
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The reality is stupidity never sells, despite Blackberry's faith in the opposite.
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There can be no answers to miserable business failures such as Blackberry, people rightfully steer away from anything Blackberry, just like avoiding those epidemic Great Plagues.
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TO Carjack:
I disagree, it's because people know about the Blackberry's and have chose other mobile phones for their businesses because they were late in trying to innovate. I was a Blackberry user, so I do know a little about them, you think.  Also worked for the company of 75K employees and were moved from BB as our standard and offered iPhone and Androids, because they could do so much more than just be a phone and do corporate email. I still stand by my statement they did not innovate quick enough.  Sounds like history repeating itself... like Kodak and the digital camera; and audio cassettes and CD's... and so forth...
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To: robert0z

"I thought their hardware business already died a couple of years ago, when they stop innovating their phones..."

The above text was your initial post. You added the rest in your reply to my comment. This isn't a discussion by osmosis. "I still stand by my statement they did not innovate quick enough." That wasn't in your initial post. You said, "they didn't innovate." There was nothing there about a time element.

Please...no more Monday morning quarterback posts. It's pointless.
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