BlackBerry shares lifted by huge Pentagon contract

23 Jan 2014

NEW YORK, USA: BlackBerry shares leapt more than nine percent after the troubled Canadian smartphone manufacturer was boosted by the news of a contract to supply the US military with 80,000 new handsets.

BlackBerry has received an order for 80,000 handsets from the Pentagon, boosting its share price by 30% so far this year. Image: Crackberry

The stock gained 9.36% to end at US$9.93, capping a rally of some 30% so far in 2014 and more than 60% from its lows last month, when the company reported a quarterly loss of more than US$4bn.

The latest gains came after last week's announcement from the Pentagon that it will include 80,000 BlackBerry phones as part of a new "mobility" programme for the Defence Department, which also includes devices made by Apple, Samsung and Motorola.

BlackBerry shares started a rebound last month after it announced plans to outsource its handset production to Taiwan-based Foxconn, which according to analysts could help the Canadian firm concentrate on software and services and avoid many of the risks of the volatile smartphone segment.

Last year, the company said it was considering a sale or other strategic move, but later scrapped those plans and told customers it was staying in the smartphone business.

BlackBerry helped create a culture of mobile users glued to smartphones, but lost its lustre as many users moved to iPhones or devices using Google's Android software.

It still has some 70m subscribers worldwide, but most of these are using older handsets, with newer devices on the BlackBerry 10 platform, unveiled a year ago, failing to gain traction.

Source: AFP via I-Net Bridge

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