WATERLOO, ONT.—Sales of BlackBerry’s smartphones continued their steep slide in the past quarter, selling their lowest number since 2007, but the company’s chief executive officer remains committed to making devices.

“I don’t want to give up on the hardware business,” John Chen told shareholders at the company’s annual meeting on Tuesday, after reporting a first-quarter loss of $28 million (U.S.), or 5 cents a share — worse than analysts’ forecasts.

“I think there’s still a shot at making money in the hardware business.”

The average selling price of BlackBerry phones was only $240 (U.S.), in a quarter in which the company sold a mere 1.1 million units.

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BlackBerry’s current hardware lineup

To combat costs, the company has signed joint development and manufacturing deals with Wistron Corp. and Compal Electronics, both of Taiwan, which should cut costs and take inventory off BlackBerry’s books.

It is modelled after BlackBerry’s partnership with Foxconn Technology Corp., which also makes Apple’s iPhones and iPads.

Some observers are speculating that BlackBerry may have to put Google’s Android software on a device, in part to lure users who want the accompanying Android apps, but still want a physical keyboard.

Chen refused to comment on a Reuters story from earlier this month that quoted unnamed sources that suggested the company is prepared to put Android on a phone, possibly a new slider version, with both a touch screen and keyboard that’s due this fall.

When pressed by reporters about how BlackBerry could tout its highly secure devices, which are its biggest selling point among corporate and government clients, and then turn around at the same time and consider the less-secure Android, Chen said he would use Android only if it was secure.

“I always said, if I could secure Android, I would make an Android phone,” he said. “I said it numerous times. Now if I can’t, then I won’t.”

Chen, who came aboard the company in 2013 as the turnaround expert, told shareholders that he remains committed to hardware devices because they are critical to leveraging the company’s security software, which he sees as the future.

In fact, Chen has set a target of $500 million (U.S.) in revenues this fiscal year from software and licensing deals plus another $100 million (U.S.) from its BBM messaging service by March 2016.

Analysts have repeatedly questioned the goal, with some suggesting $450 million might be more realistic.

Chen reiterated that target on a conference call with analysts on Tuesday, saying he believed the sales potential is there. Its first-quarter revenues from software sales such as Blackberry Enterprise Service known as BES12 as well as licensing deals was $137 million (U.S.), up 150 per cent from the same period a year earlier.

BlackBerry has been touting BES12, a device management system that allows them to manage BlackBerry phones as well as devices powered by other software including Android, Apple’s iOS and Microsoft’s Windows operating system.

Chen thanked shareholders for their patience, noting that the company has managed to slash costs amid falling revenue. He noted, however, BlackBerry now has $3.32 billion (U.S.) in cash, and could use it for potential strategic acquisitions to bolster its software division. It has made three such purchases since last summer.

BlackBerry has continued to slash its workforce, including some recent cuts in Sweden, with Chen adding that costs of operating in Sweden were simply too high.

While he wouldn’t rule out more layoffs in Canada, he noted BlackBerry has hired in certain divisions where staff are needed such as in software and support in both Ottawa and Cambridge.

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He did hint at possible consolidation of some operations between Ottawa and the United States.

“The way I think about it is if we’re going to start a device business, what are the investments that should be put together,” he said. “We don’t have to do everything ourselves.”

He noted that many of the components in an iPhone or a Windows phone or a BlackBerry are the same. “We have to pick the right combinations and get the right features and software on it.”

Despite repeated speculation that BlackBerry might be up for sale, Chen denied it.

“Oh no, no, no, no, not at this price, no” he said. “I think we put in a lot of hard work, and put ourselves, in my opinion, a position to fight. And we’re not done yet, by any stretch of the imagination.”

By the numbers

Revenue from smartphone sales: $263 million

Revenue from software and technology licensing: $137 million

Overall revenue: $658 million

Loss: $28 million, or 5 cents a share

Cash and investments: $3.32 billion

All figures are in U.S. dollars, from 1st quarter of fiscal year 2016 for three months ending May 30, 2015

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