TORONTO (AP) — BlackBerry reported a massive $4.4 billionloss in the third quarter and 56 percent
drop in revenue in its firstresults under new chairman and interim chief executive John Chen whohopes to
make the company profitable again by 2016.BlackBerryalso announced Friday it is entering into a five-year
partnership withFoxconn, the Taiwanese company that assembles products in vast factoriesin China. Foxconn
will jointly design and manufacture some newBlackBerry devices and manage the inventory of them."I’m
hopingwe never have to have a conversation going forward about inventory writedowns," Chen said on a
conference call with analysts.Chen saidhe thinks BlackBerry "has a really good shot" of turning a
profit in2016 and said management will try its best to achieve that. Chen laterlaughed when an analyst
wished him "best of luck."The formerSybase CEO is credited with turning around Sybase, a data
company thatwas sold to SAP. He said turning BlackBerry around would be his most"complicated’ challenge
but said the company has $3.3 billion in cashand that will "definitely allow us to engineer our
turnaround."BlackBerry reported revenue of $1.2 billion, down from $1.57 billion in the same quarter
last year.Chenhas said the company "is very much alive" but is putting more emphasison
Blackberry’s software business than its hardware business.He saidfirst Foxconn’s BlackBerry phones will be
released in March or April andwill be built in Indonesia."I’ll be happy to have a breakeven or a low
margin device business and then have that help us to monetize software," Chen said.BlackBerrysaid it
sold just 1.9 million smartphones in the quarter compared to3.7 million in the previous quarter and said
most of them were oldBlackBerry 7 devices. This year’s launch of BlackBerry 10, its revampedoperating
system, and fancier devices — the touchscreen Z10 and Q10 forkeyboard loyalists — was supposed to rejuvenate
the brand and lurecustomers. But the much-delayed phones failed to turn the company aroundand have led to a
billion dollar loss last quarter and a multibillionloss in the third quarter."It was ugly, said Colin
Gillis, an analyst at BGC Partners.Gillissaid allowing BlackBerry to be made by Foxconn could pose a problem
fora company that relies on governments for a lot of its business.BlackBerry has long emphasized
security."It opens up somesecurity concerns. If you are a government agency with national securitydata
running through your phones do you have concerns now that they aremade by Foxconn," Gillis said.Apple
Inc.’s products are assembled by Foxconn in vast factories in China.BlackBerry’snet loss amounted to $8.37
per share in the latest quarter. Itsadjusted loss from continuing operations, which excludes
restructuringand other items, was $354 million, or 67 cents per share.Analysts polled by FactSet, on
average, expect an adjusted loss of 43 cents per share on revenue of $1.66 billion.Sharesof BlackBerry
initially fell 7.2 percent in premarket trading butrebounded during the conference call with analysts.Its
shares were up13 cents, or 2.1 percent, to $6.38 shortly before the market opening.BlackBerry did report a
strong cash position at the end of the quarter with the $3.2 billion and no debt.TheBlackBerry, pioneered in
1999, had been the dominant smartphone foron-the-go business people and other consumers before Apple
introducedthe iPhone in 2007 and showed that phones can handle much more thanemail and phone calls. In the
years since, BlackBerry Ltd. been hammeredby competition from the iPhone as well as Android-based
rivals.Chenis putting more emphasis on BlackBerry’s mobile device managementbusiness, which allows IT
departments to manage different devicesconnected to their corporate networks. He is also
emphasizingBlackBerry’s popular BlackBerry Messenger application that is now alsoavailable on Apple and
Android devices. And he is also emphasizingBlackberry’s embedded QNX software systems, which are used
in-vehicleinfotainment systems and industrial machines.Copyright 2013 The Associated Press. All
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