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BlackBerry To Work With Foxconn On New Smartphone For Growing Markets As It Posts $4.4B Loss

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BlackBerry announced its fiscal Q3 2014 results today, and the numbers aren’t pretty. The company revealed a whopping $4.4 billion GAAP-adjusted loss for the quarter, which includes a write-down on current inventory of around $1.6 billion. It “recognized revenue” on only 1.9 million BlackBerry handsets, compared to 3.7 million in the same period a year ago, but it also claims that it sold around 4.3 million BlackBerrys through to end customers it says, of which 3.2 million were BlackBerry 7 handsets. Whichever way you look at that, it’s not good.

BlackBerry stressed the growth of Enterprise Services, Messaging, and QNX Embedded OS in auto and cloud as high points, and noted a change in corporate structure in which those are given more equal weight against its Devices unit. And as for the Devices unit, BlackBerry announced a partnership with Foxconn that will span five years and kick off with a smartphone unit designed specifically for “Indonesia and other fast-growing markets in early 2014.”

This partnership could offload the majority of BlackBerry’s hardware inventory management duties to Foxconn, and Mexico is named as another early target for devices coming out of the arrangement. Essentially, it sounds much more like BlackBerry is making Foxconn a licensee with more or less full control over its smartphone division, while it continues to work on services and software in-house. It could be a good way to offload the risk and responsibility of handset production while still selling to its remaining market strongholds.

Earnings for this quarter were dismal, and missed already bleak analyst expectations. The company is in yet another transition phase as it looks to its new CEO John Chen to help it recover from the lasting damage done by the BlackBerry 10 launch and the very poor sales of Z10 and Q10 handsets. No one expected them to do well this time around, but a $4.4 billion loss is over four times what it suffered even last quarter, so it’s clear that changes at the faltering company have just begun.

[Illustration: Bryce Durbin]