The financial report released today showed that the Waterloo, Ont.-based company’s second quarter revenue dropped 31.8 per cent from a year earlier. A press release today reiterated the company’s intentions to focus on its software business and said that chief financial officer James Yersh will be stepping down next month. He will be replaced by Steve Capelli, former president of worldwide field operation for Sybase, an enterprise software company owned by SAP.
“Our new Mobility Solutions strategy is showing signs of momentum, including our first major device software licensing agreement with a telecom joint venture in Indonesia,” A statement from BlackBerry chief executive officer John Chen said.” Under this strategy, we are focusing on software development, including security and applications. The company plans to end all internal hardware development and will outsource that function to partners.”
He said this will allow BlackBerry to cut cost and improve return on invested capital.
Chen, who was brought in as CEO in 2012 with the mandate to rejuvenate the struggling Canadian smartphone company, sounded upbeat and focused on the gains of BlackBerry’s software business.
The company reported total revenue of $334 million. Software and service revenue were $138 million. This was the “eleventh consecutive quarter of positive adjustment EBITDA,” a BlackBerry press release said.
“We are reaching an inflection point with our strategy. Our financial foundation is strong, and our pivot to software is taking hold,” Chen said. “In Q2, we more than doubled our software revenue year over year and delivered the highest gross margin in the company’s history.”
Last week, the company also made the initial shipment of its new BlackBerry Radar, an end-to-end asset tracking system. The contract to provide an asset tracking system to one of Canada’s largest trucking company signals BlackBerry’s entry into the lucrative Internet of Things market.
BlackBerry also signed a strategic telecom licensing agreement in Indonesia which Chen hopes will drive global adoption of his company’s BBM consumer business.
The newly formed joint venture PT BB Merah Putih will license BlackBerry software and services for the production of handsets for the Indonesian market.The venture is led by PT Tiphone Mobile Indonesia Tbk, a leading telecommunication company with the largest distribution network in Indonesia.
The joint venture aims to support efforts by the Indonesian government to promote the development and manufacture of value-added LTE smartphones.Under the agreement, BB Mera Putih will source, distribute and promote BlackBerry-branded devices that use BlackBerry-secured Android software apps.
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