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BlackBerry steadies the ship but smartphone sales continue to evaporate

Matt Brian, @m4tt
06.19.14
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BlackBerry's plan to cut costs and shift to services is starting to pay dividends. While the company's latest financial earnings report shows it's still suffering losses, they aren't as bad as expected. It certainly wasn't thanks to its smartphones, which were once BlackBerry's main source of revenue, as they fell to just 2.6 million units from 3.4 million in the last quarter. This time around, the Canadian smartphone maker didn't divulge how many BB7 and BB10 handsets it sold, suggesting the newer OS just isn't tempting consumers and businesses to part with their iPhones and Android devices. For reference: BB7 smartphone sales more than doubled those of BlackBerry 10 last quarter.

Again, BlackBerry saw the majority of its revenue (54 percent) come from its services, which CEO Jon Chen believes will help the company become profitable by 2016. But that all hinges on whether it can succeed in providing secure communications for large companies and government agencies. Right now, BlackBerry's cost-cutting measures (and the sale of its Canadian offices) are helping to balance out this quarter's mobile losses. But if it can't boost income from the most profitable part of its business, BlackBerry could fit itself back at square one with no room to cut any more costs.

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