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   From: n.ortel@bk.com   
      
   OTTAWA — BlackBerry’s introduction of two phones aimed at its   
   traditional base of corporate users failed to reverse the   
   company’s slide in the handset market, the company said in   
   releasing its earnings on Tuesday.   
      
   Blackberry, a Canadian smartphone maker, said it sold only 1.1   
   million phones in its first quarter, a decline of 500,000 from   
   the previous quarter. The company, led by John S. Chen, also   
   reported an adjusted loss of $28 million, or 5 cents a share, on   
   revenue of $658 million, compared with a loss of $60 million, or   
   11 cents a share, on revenue of $966 million in the period last   
   year.   
      
   From the earnings, it was unclear whether Mr. Chen’s strategy of   
   transforming BlackBerry into a company focused on selling   
   software was advancing as quickly as planned.   
      
   The software and service business of BlackBerry grew 150   
   percent, to $137 million, over the previous quarter. But during   
   a conference call with analysts, Mr. Chen, the company’s chief   
   executive and executive chairman, said that the bulk of that   
   growth had come from a patent licensing deal with Cisco Systems,   
   as well as one with another company, which he declined to   
   identify.   
      
   While Mr. Chen said that a legal agreement with Cisco prevented   
   him from disclosing the amount of money BlackBerry will receive   
   or the terms of the arrangement, he said that he did not expect   
   the overall software business to grow in the current quarter.   
      
   He also had little to say about sales of the Passport and the   
   Classic, expensive phones that BlackBerry had hoped would revive   
   interest in its handsets among corporate and government users.   
      
   Mr. Chen characterized the sales of the Passport, which has an   
   unusual square screen above its physical keyboard, as “rather   
   steady.” He said sales of the Classic, which uses the company’s   
   new operating systems while emulating BlackBerry’s traditional   
   physical design, were still rising. Mr. Chen acknowledged that   
   the design of the BlackBerry Leap, a relatively inexpensive   
   phone, was disliked by some consumers, particularly traditional   
   BlackBerry customers, and that it was still too early to assess   
   its sales.   
      
   Offering no details, Mr. Chen suggested that the phones’   
   problems were mainly related to weak marketing and advertising.   
   “We just need to bring awareness up,” he said.   
      
   During the brief period of the call devoted to the phone side of   
   the business, Mr. Chen repeated that software was his focus and   
   said that he planned to reallocate hardware spending. In the   
   first quarter, phones accounted for about 40 percent of   
   BlackBerry’s sales, services were 38 percent and software was 21   
   percent.   
      
   Mr. Chen estimated that 60 percent of BlackBerry’s software   
   sales involved new software that allowed corporate and   
   government information technology departments to manage and   
   bolster security, not just on BlackBerrys used by employees but   
   also on iPhones from Apple and phones using the Android   
   operating system from Google.   
      
   He said BlackBerry made about 2,600 deals with companies and   
   governments during the quarter. That was 400 more transactions   
   than in the previous quarter. While he offered no hard numbers,   
   it appeared that the majority of those buyers were existing   
   customers.   
      
   Mr. Chen said he was confident that software revenue, excluding   
   patent licenses, would rise throughout the coming year.   
      
   “I feel the direction and momentum,” he said.   
      
   http://www.nytimes.com/2015/06/24/technology/blackberry-q1-   
   earnings.html?_r=0   
       
      
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