BlackBerry phone sales fall even as it launches Priv

BlackBerrysold about 100,000 fewersmartphonesin its last quarter despite the launch of its first Android-powered device, thePriv.

The company said Friday it sold roughly 600,000cellphonesover the three-month period ending Feb. 29, the first full quarter to include sales of thePriv, whichBlackBerryreleased with much fanfare last November. It did not specify how many of those devices were thePriv.

• BlackBerrylays off 200 employees in Waterloo, Ont., and Sunrise, Fla.
• BlackBerryPRIVAndroid phone could be company's last, says analyst

In the previous quarter, BlackBerrysold roughly 700,000 phones.

BlackBerry has a lot riding on the Priv. Some industry watchers anticipate BlackBerry will stop producing cellphones altogether if Priv sales are lacklustre.

I still believe that we have a shot at it- BlackBerryCEO John Chen

Executive chairman and CEO John Chen admitted hardware revenue fell short of the company's expectations. But he said he remains optimistic about BlackBerry's future in the smartphone market.

"I still believe that we have a shot at it," he said during a conference call with investors in Waterloo, Ont., where the company is headquartered.

"Hopefully, I'm not naive."

He partly attributed the drop in sales to lengthy contract negotiations with major cellphone carriers including Verizon Wireless that pushed new distribution deals into the next quarter. BlackBerry plans to tackle distribution, which Chen identified as the main issue, to help increase sales.

Priv in 34 countries

The Priv is now available in 34 countries, he said up from four since the previous quarter.

As the high-end smartphone market is becoming saturated, Chen said he is also looking at creating a mid-range device, but is not prepared to make an announcement yet.

The company is on track to make money from its smartphone business during this fiscal year, Chen said. But he reiterated that if the business remains unprofitable, BlackBerry will have to stop making smartphones.

BlackBerry's other businesses performed better this quarter. Its software and services revenue was up 106 per cent for the same quarter year over year.

The company's priority is ramping up this segment of its business, Chen said. He suggested this could tie into hardware sales.

4th quarter losses

After adjustments that exclude the restructuring and acquisition costs, the loss was three cents per share less than analyst estimates of 10 cents per share.

Revenue was $464 million US, including a writedown of deferred revenue associated with recent acquisitions. Without that, it would have been $487 million.

The revenue was below analyst estimates of $563 million, according to Thomson Reuters.

At the close, BlackBerry shares were down about 7.6 per cent at $9.74 Cdn on the Toronto Stock Exchange and $7.49 US on the Nasdaq.