With Canada’s BlackBerry set to report earnings this morning before North American stock markets open, Wall Street is wondering whether the company will announce a decision about whether to close its handset business.
Though there have been no specific announcements or rumors or leaks this week, the speculation stems from a comment CEO John Chen made a year ago. In promoting an aggressive turnaround program that would increasingly emphasize software, Chen said he would close the handset division if it wasn’t profitable in a year.
He repeated that pledge on CNBC earlier this year: “If by September, I couldn’t find a way to get there, then I need to seriously consider being a software company only.”
Well, that original year is up as of today. And, as of last quarter, handsets weren’t making money for BlackBerry. Nobody is betting earnings today will reveal that handsets have met that threshold of profitability.
The company launched the Android-based Priv earlier this year, and it was not a hit. More recently, BlackBerry has rolled out the DTEK50, which some analysts think is doing better, in part thanks to a lower price.
That has some analysts split about whether BlackBerry will follow through on Chen’s statement.
The Wall Street Journal notes that RBC Capital Markets estimates the company will have reduced its operating losses on handsets in the most recent quarter. And some believe the company will still release another phone this year. At the same time, nobody seems to believe there’s much chance BlackBerry’s handsets will stem the company’s long, painful fade.
Of course, exiting the handset business is no doubt a gut-wrenching decision for the company that helped ignite the mobile revolution and was once one of the hottest brands around. Letting go of that history won’t be easy, no matter what reality and the numbers say.