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BlackBerry Is Bullish on Priv, and Says Its Hardware Losses Are Just About Over

"You really couldn't do anything strategically with a business that continues to lose money. We're in that ballpark now."

The Verge

Beleaguered BlackBerry says it has a winner with the Priv, its first smartphone based on Google’s Android software.

Chief Executive John Chen told investors Friday that the device has been well received by reviewers and that the company is close to stanching the losses from its once-storied hardware business.

“My first goal is to get us into a break-even position with the device business, because you really couldn’t do anything strategically with a business that continues to lose money,” Chen said during BlackBerry’s fiscal third quarter earnings call. “We’re in that ballpark now.”

BlackBerry exceeded Wall Street’s expectations for its November quarter, thanks largely to software revenue from its acquisition of Good Technology Corp.

BlackBerry cut its non-GAAP losses to $15 million, or three cents a share for Q3. Wall Street expected BlackBerry to report a loss of 14 cents a share. Revenue reached $557 million, up sequentially from the August quarter, and better than analyst forecasts of $489 million.

Wall Street has been focused on initial sales of the Priv, which was introduced in Nov.6 and marketed as a device for those concerned about security and privacy. BlackBerry said it sold about 700,000 units of the device in the quarter, shy of some analyst forecasts that sales would reach 900,000 handsets.

Chen said the Priv, which launched in the U.S. exclusively through AT&T and in Canada with three major carriers, is appealing primarily to BlackBerry devotees. But he said some consumers were switching from Android and Apple.

The move to the Android operating system has resulted in significant savings in engineering costs on the device, “because we don’t have to do everything ourselves in the operating system world,” Chen said.

BlackBerry stock was up 4 percent in early trading to $8.12. The stock closed down 29 percent Thursday.

This article originally appeared on Recode.net.