Wells Fargo: BlackBerry shipped 850,000 Priv smartphones during quarter, but distribution may lag

The analysts at Wells Fargo Securities expect BlackBerry to report shipping roughly 850,000 Priv smartphones during the company's most recent quarter, a figure the financial analyst firm said would help push the vendor's overall corporate quarterly revenues to around $571 million -- slightly above Wall Street expectations of $565 million.

However, the Wells Fargo analysts said in a report this morning that the Priv appears to only be available in 20 countries across the world so far, a situation that would put BlackBerry behind the goal set by CEO John Chen in December. During the company's quarterly earnings call at the end of last year, Chen said BlackBerry would be selling its Priv Android phone in fully 31 countries by February of this year.

When questioned on the topic by FierceWireless, officials at BlackBerry said the issue would be addressed by the company tomorrow during its scheduled fiscal fourth-quarter results earnings call. 

The Priv smartphone represents a new strategic direction for Canada's BlackBerry, which prior to the phone had based its smartphone strategy around selling phones running its own BlackBerry 10 operating system. The Priv runs Google's Android operating system, though BlackBerry has positioned the device as more secure than other Android phones from the likes of Samsung and HTC.

BlackBerry's switch from its own operating system to Google's Android comes as little surprise; comScore reported that Android commanded fully 52.8 percent of the U.S. smartphone market in January, while the BlackBerry operating system hovered at just 0.8 percent.

Moreover, sales of the Priv likely will dictate BlackBerry's eventual strategic direction, including whether it will remain in the cutthroat market for smartphone hardware or if it will vacate the sector altogether. "We believe guidance next qtr will be dictated by sell-through of Priv and expect that visibility to whether a strategic decision needs to be made on the hardware (HW) business could come in the next qtr or two," Wells Fargo analysts said in their report this morning. BlackBerry's software and services business "should see growth for the full year driven by acquisitions and easy comps while Service revs should continue to decline at a mid to high teens percentage pace. We expect to get more detailed disclosure around BBRY's businesses but think the direction of the HW biz will be the most important."

Wells Fargo said it expects BlackBerry to report software revenues for the full-year 2015 of more than $500 million, exceeding the company's goals. The analyst firm also said it expects BlackBerry to report gross margins of 47.6 percent in its most recent quarter, up from corporate guidance of 40 percent.

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