The banal rose as abundant as 17 percent afterwards the aggregation appear the five-year affiliation with FIH Adaptable Ltd. The Hong Kong-listed assemblage of Taiwan's Foxconn will initially body low-end accessories for auction in Indonesia and added arising markets. BlackBerry said it hoped to aggrandize the apprentice accord to its top-of-the-line smartphones.
The accord is anarchistic in that BlackBerry will no best pay upfront for apparatus acclimated in the accessories fabricated on its account in Foxconn's Indonesian and Mexican factories.
Instead, Foxconn, the trading name of Hon Hai Precision Industry, will booty a allotment of accumulation on anniversary accessory in acknowledgment for demography on account management, which can aftereffect in writedowns if smartphones go unsold. Foxconn will additionally advice with developing, designing and distributing the handsets.
Chief Executive John Chen, who took the captain at BlackBerry aftermost month, said he accepted the Foxconn accord to advice BlackBerry's handset business about-face cash-flow positive, and for the aggregation as a accomplished to column a accumulation for the budgetary year that begins in aboriginal 2015.
"It's about like BlackBerry is administration of its customer handset business afterwards absolutely administration of it," said Jefferies analyst Peter Misek, who likened the accord to what Hewlett-Packard Co and Dell accept done with laptops.
The move, which comes a ages afterwards BlackBerry said it was giving up on a plan to advertise itself, helped booty the bite out of the massive, $4.4 billion accident that it acquaint for the division concluded November 30, as smartphone sales shrivelled.
A new band of accessories active on BlackBerry 10 software has bootless to accretion traction, banishment the aggregation to address off $1.6 billion of account and accumulation commitments for the quarter. The antecedent division it wrote off $934 actor for unsold phones.
The Waterloo, Ontario-based aggregation pioneered the abstraction of on-the-go email, and for years its pagers and phones were must-have accessories for political and business leaders. But in contempo years it has absent its once-dominant bazaar allotment to Apple Inc's iPhone and a bulk of smartphones powered by Google Inc's Android operating system.
As of Thursday's close, the banal had collapsed 47 percent this year. It was aftermost trading up 14 percent on Nasdaq at $7.13.
"The best actual claiming for the aggregation is how to alteration the accessories operations to a added assisting business model," said Chen, who is accustomed with axis about Sybase, a database and adaptable software company, afore it was awash to German software aggregation SAP AG in 2010.
Chen has said he is counting on able advance in BlackBerry's account business, which manages smartphone cartage on the centralized networks of accumulated and government clients.
"Just auctioning all the being and active on with the allotment of the business that makes money makes a heck of a lot of faculty to me and that is actual acutely area Chen is going," said Ross Healy, a portfolio administrator at Macnicol & Associates who owns a baby cardinal of BlackBerry shares.
Carolina Milanesi, an analyst at Kantar Comtech, said the accord is a acceptable move for Foxconn, the world's better cyberbanking genitalia architect and a above accomplice of Apple Inc.
"This ability be the aboriginal footfall for them to try and diversify, and agreement with putting their cast on the articles they make," she said.
Devices are a challenge
In his aboriginal presentation to analysts afterwards the absolution of BlackBerry's results, Chen addled an upbeat accent choleric with a abundant dosage of realism. The mix may accept helped allay afraid investors who had acutely bargain their expectations for BlackBerry afterwards a cord of black news.
"It's bright that he's not the old guard, he's not there aggravating to do what Lazaridis and Thorsten were up to. He's absolutely been demography some accurate steps," said Mark McKechnie, an analyst at Evercore Partners, apropos to BlackBerry's architect Mike Lazaridis and Thorsten Heins, Chen's predecessor.
Chen confused bound to brand his ascendancy on BlackBerry, hiring several above colleagues from his time at Sybase and SAP for chief roles in accumulated strategy, marketing, and action strategy, a key assemblage in the stripped-back company.
BlackBerry awash about 4.3 actor handsets in the third quarter, with beforehand BlackBerry 7 models accounting for about 3.2 actor of that number.
The aggregation recognised accouterments acquirement on 1.9 actor devices, bottomward from 3.7 actor in the antecedent quarter.
On a brighter note, its banknote accumulation grew to $3.2 billion from $2.6 billion a division earlier, but that included $1 billion aloft by arising convertible addendum to a accumulation of investors aftermost ages afterwards calling off a months-long look for a buyer.
Service acquirement slipped 13 percent as beneath bodies paid to use BlackBerry's defended network, and the aggregation said that akin of abatement could be accepted to continue.
Along with the writedown on unsold phones, the aggregation additionally bargain by $2.7 billion the accustomed amount of some abiding assets, mostly licensing deals fabricated back it was far larger.
Quarterly results
The aggregation appear a third-quarter net accident of $4.4 billion, or $8.37 a share, compared with year-earlier net assets of $9 million, or 2 cents a share.
Excluding the account writedowns and crime charges, the accident was $354 million, or 67 cents a share.
Analysts on boilerplate had accepted a accident of 44 cents a share, according to Thomson Reuters I/B/E/S.
Revenue fell to $1.19 billion from $2.73 billion as added ambiguity about the company's fate led to added sales erosion. Wall Street had anticipation $1.6 billion.
Morningstar analyst Brian Colello said BlackBerry's turnaround action was added important than its latest operating results.
"I don't anticipate it's a abruptness that the revenue, operating allowance and the business continues to decline. I anticipate the bigger catechism is, what is the turnaround adventure at this point?" he said. "They accept a lot of altered assets that could point the aggregation in altered directions."