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Will BlackBerry’s New Smartphone Result in Revenue Growth?

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Key2 was launched on June 7

We know that BlackBerry (BB) exited the smartphone manufacturing business in late 2016, driven by competition from Apple, Samsung (SSNLF), and China’s (FXI) Huawei, Xiaomi, and others. But BlackBerry has signed licensing agreements with several smartphone manufacturers.

BlackBerry’s patent licensing agreement will allow it to sublicense various BlackBerry patents to global smartphone manufacturers. It has licensing partnerships with BB Merah Putih, TCL, Optiemus Infracom, and Emtek.

Last week, TCL launched the BlackBerry KEY2 for a price starting at $649. The phone has a 4.5-inch touchscreen with an LCD (liquid-crystal display) and equipped with a Qualcomm (QCOM) Snapdragon 660 processor. The KEY2 has memory space for in-built storage of 6 GB (gigabytes), 64 GB, and 128 GB.

TCL aims to achieve a 3%–5% share in the global smartphone market over the next 12 months. Global industry reports suggest that there were more than 850,000 BlackBerry devices sold in 2017.

Analysts, however, are wary with regard to device sales in the United States since TCL has not partnered with any service provider to sell the KEY2.

Licensing revenue rose 54% in fiscal 2018

As you can see in the chart above, BlackBerry’s licensing revenue rose 54% YoY (year-over-year) from $127 million in fiscal 2017 to $196 million in fiscal 2018.

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