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BlackBerry Third Quarter Earnings Miss But Its Bet On Software Is Turning Out Well

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Just yesterday TechBooky did a report about BlackBerry focusing more on its 20 year old self-driving cars project along with its connected cars one.  It looks like that has paid off as revenue from its smartphones continue to drop.

Their third quarter earnings report is out and a quick summary is that the Canadian company raked in $301m in revenue versus $322m. Smartphones made up about 23 percent ($62 million versus $220 million a year ago) of that while services made up 55 percent.

“Non-GAAP revenue for the third quarter of fiscal 2017 was $301 million with GAAP revenue of $289 million. The non-GAAP revenue breakdown for the quarter was approximately 55% for the Software & Services segment, 22% for the Service Access Fees (SAF) segment, and 23% for the Mobility Solutions segment.

Approximately 80% of the third quarter Software & Services segment revenue (excluding IP licensing and professional services) was recurring. BlackBerry had over 3,000 enterprise customer orders in the quarter.”

But BlackBerry CEO John Chen was optimistic of the future of the smartphone pioneer company. He said “We achieved significant milestones in Q3, delivering the highest gross margin in the company’s history for the second consecutive quarter and continuing to transform our infrastructure and operations to support an enterprise software business.”

In any case, it looks like the Canadian phone maker’s bet on software is working big time. They are not alone in this. Apple which used to be a competitor is now placing huge bets on its services (Apple Music, iTunes, App Store, Apple Pay, iCloud etc.) which stood at $6.33b in the third quarter versus $6.11b — a 25% year-over-year increase and this is the first time it will be going above the $6b mark.