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 Chen, who has been managing the company's turnaround for the past
year, told Reuters that concerns over information security and the
political backlash that security breaches could create dimmed the
allure of the world's biggest smartphone market for Blackberry for
the time being.
Instead, the company is keen on expanding in India and Southeast
Asian countries like Indonesia, Malaysia and Singapore, Chen said in
an interview in Beijing this week during his first visit as CEO to
mainland China, where he attended the Asia Pacific Economic
Cooperation forum.
"It takes too long to ramp up to a size that is even reasonable (in
China)," said Chen.
"Even if I have that time and money I'll probably have better
returns going into a different set of markets that we are already
in, like India, South Asia, and Southeast Asia."
Questions about Blackberry's China strategy resurfaced last month
after Chen told reporters that China was "too big a market to
ignore" and that he was actively considering how to tackle a country
in which Blackberry maintains a skeleton staff.
Blackberry shares have also fluctuated in recent weeks on rumors of
a potential acquisition offer from Chinese hardware giant Lenovo
Group Ltd.
Chen, a Hong Kong native who made his name turning around software
firm Sybase during the 2000s, said he had met with Chinese
government officials, investors and telecom carriers in Beijing. He
also said he held informal meetings with executives from Lenovo and
smartphone makers Xiaomi and HTC Corp.
Chen said Blackberry would be open to a partnership with an Asian
counterpart that "has something serious to offer in business, not
cash, because we have $3 billion in cash".
The most difficult question for Blackberry in China remains
information security, which Chen has made the bedrock of
Blackberry's brand.
He said any expansion into China would likely require an agreement
with Chinese authorities over how Blackberry would respond to
requests for user data, and Blackberry would have to provide a level
of security that both Chinese and Western authorities were
"comfortable" with.
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"I don't want to get sucked into a geopolitical equation," he said.
In 2012, Blackberry reportedly allowed the Indian government to read
some encrypted communications but not messages from its corporate
customers. The Indian authorities had said that, after the 2008
militant attacks in Mumbai, they needed access to private messages
for law enforcement purposes.
Chen said he understood the law enforcement argument, but did not
want to jeopardize Blackberry's security reputation. He said he
would not turn over information without a court order.
"There has got to be a compromise," he said.
At the same time, Chinese state-owned enterprises, which comprise a
large proportion of the Chinese corporate market that Blackberry
covets, may be skeptical about data security issues, he added.
These security concerns, however, will not stop Blackberry from
exploring ways to enter "a great market", Chen said.
China may be "sometimes sensitive because of security" issues, he
added. "But there are opportunities."
(Editing by Miral Fahmy)
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