In a very recent interview with the Financial Times Telecoms Correspondent Daniel Thomas spoke with BlackBerry CEO John Chen. in the interview below Mr. Chen gives us some great insight on BlackBerry’s new path as well the truth. Thi most interesting remark below is from CEO John Chen “It’s still 80:20,” BlackBerry’s chief executive says about his chances of turning around the smartphone company. (In March he rated his chances at just 50:50)
“I am actually feeling better than that now but I never use 100:0 as that would jinx us. But we are definitely out of danger.” It is a great read so check it out below and let us know your thoughts in the comments.
John Chen was grounded by a typhoon in Hong Kong but he laughs when asked whether BlackBerry is facing similar storms.
“It’s still 80:20,” BlackBerry’s chief executive says about his chances of turning around the smartphone company. (In March he rated his chances at just 50:50)
“I am actually feeling better than that now but I never use 100:0 as that would jinx us. But we are definitely out of danger.”
Mr Chen laughs a lot. You would imagine it helps to do so, given the tumultuous time when he joined the Canadian technology group as chief executive.
It was last autumn and the company had just failed to sell itself. From an icon feted by rap stars, lawyers and US presidents, BlackBerry had become the
company that appointed singer Alicia Keys – an avid iPhone user – as its creative director.
BlackBerry was left searching for a future as share of the global smartphone market fell from about 50 per cent to 3 per cent over four years.
Its share price similarly collapsed from a peak of $139 to just $6 when Mr Chen joined.
In the months since, he has set out a clear turnround strategy, appointed a new management team, and signed partnerships with Amazon and Foxconn.
In spite of Mr Chen’s cautiousness, his efforts seems to be bearing fruit. Shares in the group were up 50 per cent on the year last month –
making it one of the best performers in its sector – as the company returned to a quarterly profit and slowed a heavy cash burn.
“The panic has gone. We are going to be a viable company and the question now is how great we are going to be. That one I will need some time to answer.”
He expects it would take six quarters to turn around the company, and then maybe five years before the wider strategy can be deemed a success.
Still, a glance around a crowded underground train station at Bank in the heart of the business district in London hammers home an unavoidable truth about
BlackBerry – that few now use the financier’s once cherished “little helper”.
Likewise, the 02 shop in the City of London carries a large range of phones but only a single BlackBerry. The neighbouring retail stores such as EE and
Vodafone have none at all.
BlackBerry is performing the sort of disappearing act from the consumer market that has many analysts writing down its chances. “The handset business is dead,”
according to Pierre Ferragu, analyst at Bernstein. “It will never have scale to compete again.”
Ken Dulaney, analyst at Gartner, says hardware sales to consumers will “make or break” the company. The numbers show that consumers have already moved to
rivals, leaving those buying BlackBerry only as a “protest vote”.
BlackBerry’s cost cutting and outsourcing the manufacturing of its phones to Foxconn were measures that merely saved it from collapse, he adds.
But Mr Chen is not worried, not least because he is placing his bets on the enterprise market. He wants to sell 10m handsets a year – a fraction of today’s
market leader such as Samsung (445m in 2013) or Apple (150m in 2013) – but adds that the phone sales, mostly to business customers, will make money.
“For the company to return to financial stability to grow again, it has to be on the back of [the] enterprise [market],” he says. “I choose not to fight all
of the wars at the same time. But by no means am I giving up on consumers. One day you will see us coming back.”
This intent – a return to BlackBerry’s roots as a company renowned for making reliable and secure work devices – is apparent in BlackBerry’s forthcoming
device, called the Passport.
Mr Chen is in Hong Kong to finalise the manufacturing of the defiantly square phone, a shape unproven with consumers but designed to be ideal for spreadsheets.
This, along with a “Classic” BlackBerry expected in the autumn, will play to its roots in producing functional, keyboard carrying devices supported by secure
software.
BlackBerry will be a platform for the “regulated industries” of finance, government and healthcare, Mr Chen says, which all need security provided by its BBM
messaging and enterprise servers.
For example, BlackBerry has already agreed a deal with a healthcare company that will use the Passport as a clinical management system.
“What we are doing is focusing on security and privacy, which is where all the things are connected. Every IT device – no matter what operating system –
we want to talk to and connect securely.
“That’s the long term, it may take five years but in the next year or two, we will be generating money, and investing in security management and becoming
tighter with the regulated industry.”
Despite Mr Chen’s optimism, investors and analysts still talk about the company in terms of its constituent parts. Gartner’s Mr Dulaney says it makes
sense for BlackBerry to be broken up and sold. He says divisions such as BBM, the QNX internet of things platform, and its network operations centre could
have value but are hampered under the funding model of the struggling parent.
Mr Chen rejects such suggestions, saying job cuts and sales of assets are over. In fact he says BlackBerry will start recruiting again, while future devices
are on the drawing board. If the Passport and Classic are successful, Mr Chen indicates, future versions will be considered. Mr Chen would also like a tablet.
“I am going to listen to the market,” he says, finally making his way to the much delayed flight from Hong Kong, noting, in passing, that many in the airport lounge are still tapping away at his company’s phones. “The only problem is that they are using the old conditions
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