According to Brian Colello, equity analyst at Morningstar Securities in Chicago, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) needs to regain faith of the investors and the success of just one of the two devices can do wonders for the company.
“One of these devices, the Passport or the Classic — and maybe it will be the Classic — needs to emerge as that front-end device that is in the customers’ hands. And, reputationally they need another hit, they need another successful phone at some point.”
Classic near release
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is nearing the launch of the new Classic device and this device is targeted at the corporate users. This device boasts of features that were popular from the days, when the brand was enjoying glorious days along with some new features that are bound to drive the ardent BlackBerry lovers crazy.
The device will be launched simultaneously in New York, Singapore and Frankfurt on Wednesday, 17th of December, by the technology company based in Waterloo, Ontario. The device sports a track pad, a QWERTY keypad and a row of navigation keys with which the old BlackBerry users are already familiar.
The last device released by the company was the Passport, which has been a huge hit, and the Chief Executive and Chairman of the company John Chen has higher expectations from the upcoming Classic device and expects it to grow more popular than the phablet sized device.
Turnaround efforts paying off?
John Chen joined in November last year as the CEO of BlackBerry Ltd. (NASDAQ:BBRY) (TSE:BB), and he came up with a plan for the company’s turnaround under which they are releasing devices with a difference, and Classic’s release is the latest step. BlackBerry pioneered the smartphone category earlier, but the new CEO has shifted the focus to software, services and enterprise clients after its repositioning. The company hopes to become profitable by next fiscal year, and its hopes are attached to the revenue from software, which it expects to double to $500 million, and from Blackberry Messenger (BBM), which will help generate revenue worth $100 million by next fiscal year.
Through the transition period of turning profitable from unprofitable, the company seeks to gain short-term profits from devices such as Classic. This becomes more important because there has been a significant fall of 10% to 15% in the revenue generated by the company from high-margin service on older devices each quarter. Mr. Chen informed that for turning profitable on hardware the company will need to sell 10 million smartphones on an annual basis.