BlackBerry CEO says company needs to sell 5M phones a year to make business profitable, hints it may exit handset business if it doesn't meet that goal
BlackBerry CEO wants to sell 5 million phones a year — It's been a long time since BlackBerry was on top of the smartphone world …
Context & Ripple Effects
BlackBerry entered 2015 with a surprise $28M quarterly profit that masked a revenue base cut in half year-over-year, and responded with a four-phone lineup built around the $275 all-touch Leap. Six months later the CEO has drawn a public line: five million handsets a year or the company walks away from making them.
That threshold is a pre-negotiated exit. The subsequent record shows why it was needed — by spring 2016 BlackBerry had posted its Q4 miss of just 600K phones and a $238M loss, far below the bar it set for itself.
First-order effects
- The CEO has put the entire handset division on notice: below five million units a year, in-house phone manufacturing is no longer defensible, making every quarterly shipment number a de facto referendum on the business.
- Investors now have an explicit kill criterion instead of open-ended hardware losses — the same leadership that delivered the 2015 profit surprise has converted handset scale into the stated condition for staying.
Second-order effects
- Falling short of the bar pushes BlackBerry toward the structure it eventually chose: ending in-house development and outsourcing design, manufacturing, and sales to partners, taken after a $372M Q2 loss.
- Partner-built devices shift BlackBerry's economics from unit manufacturing margins toward licensing its brand and bundling its software, which is exactly where the company said it would refocus.
Third-order effects
- If the pattern holds, BlackBerry becomes a software-and-security vendor that licenses its name to others' hardware rather than a device maker — the handset operation surviving as a brand asset, not a production line.
The trend: Subscale smartphone makers are converting hardware from a core business into a licensed brand, letting software and security carry the P&L.