BlackBerry wins design award for PRIV but sales disappoint

Just a day before the release of BlackBerry’s Q4 2016 results on Friday, the company announced that it has won the Red Dot Award for Product Design 2016 for its latest, and perhaps last, smartphone offering, the PRIV.
Receiving news of a design award victory must have seemed like a cruel April Fool’s Day gag for John Chen as he talked investors through BlackBerry’s Q4 earnings call on April 1, during which he enthused about the company’s strengths while also confirming disappointing figures for the one area of BlackBerry’s business that didn’t hit its targets, despite winning awards: handsets.
“In all but one area, we were in line with or ahead of our key business metrics and the metrics in the analyst model,” said Chen. “The one area of shortfall was in hardware revenue, which declined from last quarter and I will talk about plans to address this later in the call. On the plus side, we reduced a loss in hardware, a key positive device gross margin and average selling price was steady from the last quarter from Q3.”
About 70% of BlackBerry’s revenue now comes from recurring enterprise software revenue, mainly from its QNX platform and Internet of Things division.
BlackBerry’s handset sales missed not only analyst expectations of 850,000 for the quarter, but also fell short of the previous quarter’s 700,000 sales figure, a downward trend that spells bad news for the future of BlackBerry as a maker of phones.
Distribution with major American carriers can be partly to blame for the PRIV’s woes, with AT&T the only carrier picking it up at launch while T-Mobile began selling it only in January and Verizon in March.
With the PRIV, BlackBerry placed a bet that consumers would respond to the currently popular Android operating system inside a BlackBerry handset, effectively abandoning its OS 10 for an ecosytem with more robust app development.
There are at least two new BlackBerry handsets with Android operating systems rumoured to be in production.
Chen, in the conference call on Friday, struck an optimistic tone despite the weak sales figures.
“I still believe that we have a shot at it,” he said. “Hopefully, I’m not naive.”
BlackBerry’s share price plunged from a high of $10.64 on March 31 to $9.46 as of Monday morning.
In 2015, BlackBerry won the Red Dot: Best of the Best award for the Passport, having previously won Red Dot awards in 2014 and 2013 for the BlackBerry Q10 and BlackBerry Z10, as well as scooping the 2013 Best of the Best award for BlackBerry’s Porsche Design P’9981 smartphone.
“Our BlackBerry Design Team is extremely excited to be recognized by the prestigious Red Dot, given the time and energy spent on developing this next level design for BlackBerry,” said Scott Wenger, Global Head of BlackBerry Devices Design. “Priv is an innovative device encompassing a re-imagined form factor while also offering security standards on an Android device that many in the industry never thought would be possible. These design features and security enhancements set Priv apart from the pack.”
Anyone involved in creative industries, though, can tell you about the tortured relationship between critical acclaim and sales and the apparent lack of overlap between quality and popularity.
In 1941, “Citizen Kane” lost the Best Picture Award to the snooze-worthy message picture “How Green Was My Valley”, although it has to be said that the Academy Awards have got a pretty abysmal record when it comes to determining “Best Picture” in any given year, handing the award to forgettable duds like “Dances With Wolves”, “Titanic” and “Braveheart”.
Last week, an Oxfam charity shop in Swansea asked donors to please stop dropping off used copies of Fifty Shades of Grey, which had sold over 125 million copies by June 2015, making it a wildly successful novel that today can’t even be unloaded for charity, displacing the previous unwanted book record holder Dan Brown, of “Da Vinci Code” fame.
In begging the public to please stop bringing in copies of the runaway bestseller, Oxfam let people know that it would far prefer their collections old vinyl records, a format that everyone had given up on a decade ago in favour of compact discs, another previously popular format that is now basically landfill.
A decade from now, will BlackBerry enjoy the same kind of revitalized niche success for its smartphones that vinyl records are experiencing now, while Androids or iPhones go the way of compact discs, Fifty Shades of Grey and the Da Vinci Code?
The Red Dot awards received entries for 5,214 products from 57 nations, with 41 jury members determining the awards.
The 2016 Red Dot awards will be announced at the Red Dot Gala on July 4.