"If I cannot make money on handsets, I will not be in the handset
business," John Chen said in an interview, adding that the time
frame for such a decision was short. He would not be more specific,
but said it should be possible to make money off shipments of as few
as 10 million a year.
At its peak, BlackBerry shipped 52.3 million devices in fiscal 2011,
while it recorded revenue on less than 2 million last quarter.
Chen, who took the helm of the struggling company in November, said
BlackBerry was also looking to invest in or team up with other
companies in regulated industries such as healthcare, and financial
and legal services, all of which require highly secure
The chief executive said small acquisitions to strengthen
BlackBerry's network security offerings were also possible.
"We are building an engineering team on the service side that is
focused on security. We are building an engineering team on the
device side that is focused on security. We will do some
partnerships and we will probably, potentially do an M&A on
He said security had become more important to businesses and
government since the revelations about U.S. surveillance made by
former National Security Agency contractor Edward Snowden.
In a wide ranging interview in New York, Chen acknowledged past
management mistakes and said he had a long-term strategy to
compliment the short-term goals of staying afloat and stemming
"You have to live short term. Maybe the prior management had the
luxury to bet the world would come to it. I don't have the luxury at
all. I'm losing money and burning cash."
In March, the embattled smartphone maker reported a quarterly net
loss of $423 million and a 64 percent drop in its revenues,
underscoring the magnitude of the challenge Chen faces in turning
around the company.
Chen said BlackBerry remained on track to be cash-flow positive by
the end of the current fiscal year, which runs to the end of
February 2015, and to return to profit some time in the fiscal year
Chen said his long-term plans for BlackBerry included competing in
the burgeoning business of connecting all manner of devices, from
kitchen appliances to automotive consoles to smartphones.
Chen said he was not sure how long it would take for the
"machine-to-machine" or "M2M" world to become a mainstream business,
but he said he was sure that was coming.
"We are not only interested in managing BlackBerry devices. We are
interested in managing all devices that you would like to speak to
each other," he said. "To achieve our dream of being a major player
in M2M requires more partnerships with others," including telecom
companies eager to participate.
[to top of second column]
FOCUS ON ENTERPRISE BUSINESS
Chen, viewed by tech industry insiders as a turnaround artist, wants
BlackBerry to zero in on its core base of corporate and government
clients, and on its services arm, which secures mobile devices on
the internal networks of big clients.
Chen was credited with turning around Sybase Inc in the late 1990s.
Sybase, an enterprise software company, was eventually acquired by
SAP AG in 2010.
Canada's BlackBerry, which has lost most of the smartphone market to
Apple Inc's iPhone and gadgets powered by Google Inc's Android
operating system, has laid off about 9,500 employees, or more than
half its work force over the last three years, as it has rushed to
cut costs in the face of mounting losses.
The company, a one-time pioneer in the smartphone arena, has seen
its fortunes fade dramatically within a span of less than five
years. BlackBerry, which boasted a global smartphone market share of
roughly 20 percent back in 2009, has since seen that share shrink to
less than 2 percent as of the end of 2013.
Chen, who joined BlackBerry after it was unable to find a buyer in a
sale process last year, said he was not fazed by recent acquisitions
of companies offering similar services, such as Facebook Inc's $19
billion purchase of mobile messaging service Whatsapp.
"We are not going to go up against Whatsapp. We are going to be more
focused on secure communications, secure messaging," he said of
BlackBerry's BBM platform.
Chen said he was determined not to lose focus on the corporate and
other customers that helped it build its global reach in the first
place, and would not be tempted back into the much larger but more
fickle consumer smartphone race.
"We are not going to spend any more money to maintain the latest
version of Angry Birds," Chen said, referring to a wildly popular
consumer mobile videogame.
(Additional reporting by Nadia Damouni;
editing by Frank McGurty,
Steve Orlofsky and Lisa Shumaker)
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