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BlackBerry Confirms Android Plans, Posts Weaker-Than-Expected Earnings

The upcoming device, a slider phone dubbed Priv, will combine BlackBerry's security strength with Google's popular operating system.

Asa Mathat

BlackBerry on Friday confirmed its plans to launch an Android-based handset even as the company reported profit and revenue below what analysts expected.

The company said its latest quarterly loss, excluding certain items, was 13 cents per share on revenue of about $490 million. Analysts had been expecting a per-share loss of about 9 cents on revenue closer to $600 million.

The upcoming Android phone, dubbed Priv, will have a slide-out keyboard and “combine the best of BlackBerry security and productivity with the expansive mobile application ecosystem available on the Android platform,” CEO John Chen said in a statement. Priv is due out at the end of 2015, BlackBerry said, adding that it remains committed to its own BlackBerry 10 OS, which is slated to get a software update in March with further security and privacy enhancements.

“We are focused on making faster progress to achieve profitability in our handset business,” Chen said. The company also announced plans earlier this month to acquire rival Good Technology for $425 million. “From these initiatives, we anticipate modest sequential revenue growth in each of the remaining quarters of fiscal 2016.”

BlackBerry noted that it posted $100 million in free cash flow last quarter and increased its cash and investment balance to $3.35 billion, up $37 million following $47 million it spent buying back its own shares. The company hopes to turn sustainably profitable by its fourth fiscal quarter, which runs through February.

Last month, Chen acknowledged that the company’s latest handhelds had not been a runaway success and said that BlackBerry needed phones that could run more apps. He stopped short, however, of saying that future devices would run Google’s flavor of Android.

He also reiterated that his patience for losing money in handsets was limited and said he had an internal deadline in mind.

“If I can’t make money on the phone, I will be out of the telephone handset business,” Chen said. “There is a timeline; I won’t tell you when.”

We’ll have a chance to hear much more from Chen when he speaks at next month’s Code/Mobile conference in Half Moon Bay, Calif. (Click here for more details on the conference, including registration details.)

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