BlackBerry In Classic Rebound

Like an aging rock band, BlackBerry is banking on some old hits to drive new success. The gamble is whether enough of its audience has stuck around.

On Wednesday, BlackBerry finally unveiled a new device called the Classic, which essentially resurrects the traditional design that made the company into the powerhouse that it once was. The Classic features a physical keypad and is largely targeted at corporate users who still make up much of the company’s remaining user base.

Over the past year, BlackBerry has worked to slash its reliance on selling devices and build up its mobile software business. But hardware sales are still expected to account for roughly half the company’s revenue for the foreseeable future. So BlackBerry must prove that it can make those numbers work—and do it profitably.

The company’s results for the fiscal third quarter, due Friday, will offer important signals on this front. Wall Street forecasts hardware sales of $505 million for the period, up 6% year over year. That would be the first quarterly growth for this segment in recent memory, driven in part by the launch of the new Passport phone in late September. The Classic is expected to fuel a 68% jump in hardware sales in the current fiscal quarter versus a year earlier.

Those are high marks to hit. And BlackBerry’s share price has jumped more than 30% this year on hopes that it can become a leaner, more profitable entity than it was while fighting a losing battle in the consumer business against Apple’s iPhone and devices running on Google ’s Android software.

In this light, BlackBerry’s effort to woo its traditional fans is wise. It remains to be seen just how many are left who will play along.WSJ

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