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Blackberry: I thought I heard a heartbeat

Troubled phone-maker Blackberry reported a profit rise overnight. Quarterly sales revenue dropped one per cent, but cost cutting meant the company turned in a rise in gross profit.

Blackberry said its new low-cost Z3 smartphone, which it sells in Indonesia, is selling well, while the company’s services operation, which specialises in managing devices for large corporations, has won business back from rivals.

This bodes well for the company’s plans which involve less emphasis on phone hardware while selling its security and management services so that companies can deal with the mobile devices.

Services made up slightly more than half of the company’s revenue in the recent quarter.

Smartphone hardware margins are slim, at best. Few phone makers other than Apple and Samsung make profits from phone hardware. In contrast, margins on services stay healthy.