March 27, 2015 / 7:28 PM / in 3 years

BlackBerry sees part of software growth coming from acquisitions

WATERLOO, Ontario, March 27 (Reuters) - BlackBerry Ltd is likely to see a part of its targeted software revenue growth in the coming fiscal year come from the acquisition of companies that will allow it to sell more value-added services, Chief Executive John Chen said on Friday.

“Now that we have a cash generation capability, we are going to invest and some of the growth is going to be inorganic,” said Chen, who has hung his hat on the company making $600 million in software revenues in the current fiscal year.

“We are looking to buy a company, acquisition is part of our strategy this year,” he said speaking with media after BlackBerry posted a surprise fiscal fourth quarter profit and said its cash position rose to $3.27 billion.

He said any acquisitions are likely to be focused around the security and enterprise segment.

BlackBerry made a couple of strategic acquisitions last year that have allowed it to sell such value-added services. In July, BlackBerry announced it was buying Secusmart, a privately held German firm that specializes in voice and data encryption, used by the German government and other customers.

In September, it acquired Movirtu, a U.K-based tech start-up whose software allows users to have two phone numbers on the same device with a single SIM card.

The purchases have helped BlackBerry ramp up its portfolio of services that cater to the needs of its core base of clients, like corporations and government agencies.

Chen said that while there remains the chance that revenue may weaken slightly from current levels, he is fairly confident that revenue is at, or near its nadir and is likely to stabilize at these levels, before beginning to rise later this year.

He also said device shipments likely bottomed in the last quarter, and should tick higher from here. He noted U.S. carriers only began to get shipments of the BlackBerry Classic a month ago.

Chen said roughly 90 percent of device shipments in the last quarter were newer higher-margin devices like the Classic and Passport.

“I feel comfortable in my winning chances, more so now than a year ago,” said Chen. “Partly because of products, partly due to our sales force, partly because of partners, and also because many are staring to feel good about us being around. A year ago that was a problem - that’s why making money and generating cash is so important.” (Editing by Jeffrey Hodgson and Chizu Nomiyama)

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