Blackberry crashes to huge loss

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BlackBerry, which gave up on a plan to sell itself last month, reported a massive quarterly loss yesterday, as sales of its smartphones shrivelled and it booked asset impairment charges and inventory writedowns.

The company, which announced a five-year partnership with Foxconn Technology to develop and manufacture a handset for Indonesia and other emerging markets, conceded that its biggest challenge was still in its core handset business.

“While our enterprise services, messaging and QNX embedded businesses are already well-positioned... the most immediate challenge for the company is how to transition the devices operations to a more profitable business model,” said John Chen, who last month was named chief executive officer.

Chen has said he will not jettison the hardware operation and is counting on strong growth in its service business that manages smartphone traffic on the internal networks of corporate and government clients.

BlackBerry sold about 4.3 million handsets in the third quarter ended November 30, including some shipped to suppliers earlier.

Older BlackBerry 7 models account for about 3.2 million of the smartphones. The company recognised hardware revenue on 1.9 million devices, down from 3.7 million in the prior quarter.

The company reported a third-quarter net loss of $4.4bn, or $8.37 a share, compared with year-earlier net income of $9m, or 2 cents a share.

Excluding the inventory writedowns and impairment charges, the loss was $354m, or 67 cents a share.