It was a sad message on the Shop BlackBerry site this weekend that greeted Canadian and American shoppers who wanted pre-order their BlackBerry Classic smart phone when they hit the pre-order button for the handset: We’re sorry but BlackBerry Classic (Pre-Order) is currently out of stock and cannot be added to your cart. We apologize for any inconvenience.
Well sad for shoppers maybe, but definitely welcome news for the Waterloo, Ont. phone maker that is desperately looking for another hit product in order to get back in the black and remain relevant in the mobile market. Canadian carriers started taking Classic pre-orders in November.
The QWERTY keypad-equipped Classic is set to debut on December 17 in New York, Singapore and Frankfurt, and if pre-order sales are any measure of its customer appeal it appears BlackBerry’s (TSE: BB) decision to go old school was the right call.
The Classic is a part of BlackBerry CEO John Chen’s comeback plan for the company. When Chen joined the company in November, it had already been under extreme pressure for several years, suffering humbling losses in a market segment it originally pioneered. In 2013, BlackBerry shed some 4,300 employees, or a third of its workforce. Its attempt to catch up with competing products such as Apple’s iPhone and various Android phones by introducing the all-touch screen Z10 forced the company to take a $934 million tax write-down largely due to poor sales of the handset.
But in September, Chen reported that although BlackBerry lost $207 million in its last quarter, the company made a profit of approximately $916 million.
“We delivered a solid quarter gains our key operational metrics, and we are confident that we will achieve break-even cash flow by the end of FY2015,” he said.
In an interview with the Financial Post, Brian Colello, equity analyst for Morningstar Securities in Chicago, said that BlackBerry needs either the Passport or the Classic to become a hit in order to gain investor confidence.
“…maybe it will be the Classic…to emerge as the front-end device that’s in the customers’ hands,” he said. “And reputationally, they need another hit, they need another successful phone at some point.”
BlackBerry intends to generate software revenue of $500 million and another $100 million from its BlackBerry Messenger.
Chen also said the company needs to sell 10 million smart phones each year for its hardware business to remain profitable.
