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| The BlackBerry Leap was a mid-market smartphone that eschewed the typical physical keyboard for a full touchscreen. |
BlackBerry's smartphone business is fading, and it's reaching out to Google's Android software as a lifeline.
BlackBerry confirmed that it was building a smartphone that would run on Android, a radical departure from its typical strategy of employing its own software. The device, called the Priv, has been long rumored. Using Android would solve one of the biggest problems with the BlackBerry software: The lack of key consumer apps, including popular ones like Google Maps.
The company also said on Friday that it recognized revenue on 800,000 devices, or a third of the number from a year ago. Out of its total revenue of $490 million, 43 percent came from service access fees, eclipsing hardware for the first time.
The figures underscore the continued evolution of the company, once a dominant smartphone manufacturer, into a software and services business catering to large business and government clients. While BlackBerry continues to put out products, it has increasingly ceded that business to more dominant players such as Apple and Samsung Electronics.
It has been a rough transition. BlackBerry posted a fiscal second-quarter profit of $51 million, or 10 cents a share, compared with a year-ago loss of $207 million, or 39 cents a share. The profit, however, was helped by one-time items. Remove those, and its business actually lost $66 million, or 13 cents a share.
Both revenue and its adjusted loss fell below Wall Street's forecast. The company was expected to post a loss of 9 cents a share on revenue of $611 million, according to an average estimate of analysts compiled by Thomson Reuters.
The Canadian company has been focused on stabilizing the business, offsetting the declines in its devices with more service revenue and reducing its cash burn. It ended the quarter with $3.35 billion in cash, cash equivalents, short-term and long-term investments, slightly higher than the fiscal first quarter.
BlackBerry has also been more concerned with the acquisition of business-centric companies such as crisis communications network services provider AtHoc and mobile email and security provider Good Technology, announced earlier this month.
The company anticipates sequential revenue growth in the remaining quarters of fiscal 2016.
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