AH Tech Talk: BlackBerry CEO, John Chen, Details BlackBerry’s Survival Plan

BB and Chen collage

Our CrackBerry friend, Kevin, had a chance to interview the interim BlackBerry CEO, John Chen, during lunch the other day and came away with what Chen believes to be the crucial things that BlackBerry must do in order to first survive and then be able to thrive.

The first thing that Chen did was to let everybody know that he is “now the Chairman and CEO.”  Chen said that he had recruited his team and laid out his vision and strategy, but he still needs to make sure that it is properly executed and their financial footing is strong – who best to do that than Chen, himself.

Chen made it clear that at one-time they were mainly handset driven, but in order to thrive there are four main objectives BlackBerry must now pursue:

“We’re going enterprise.  We’re going messaging.  We’re going devices.  We’re going QNX…The company has a lot of different assets.  Some of them are not well monetized or well invested.  Some of them are not well known.  I thought it’s important that the investor market knows exactly what BlackBerry actually brings to the market.”

 

Enterprise Security

Chen believes that BlackBerry’s most precious asset is their BlackBerry Enterprise Server (BES) software that has long dominated the business and governmental worlds.  However, with BlackBerry so concerned with BB10 and launching new smartphones, BES was put on the back burner.  Especially since at one time their handset sales, drove their BES deployment, but with so many employees wanting to use their iPhones and Android devices, businesses looked to other options.  Chen says there is a lot of goodwill still out there, but that BlackBerry must “get the enterprise customer interested in us again.” Instead of concentrating on selling smartphones to push BES sales, they must position BES as a platform for all devices:

“You could be an iPhone customer, and also a BlackBerry customer.  You could be an Android customer, and also a BlackBerry customer.  It’s not mutually exclusive.  I think that’s an important key message of the company going forward.”

Mobility and security is something that all businesses and governments must deal with now and in the future and by being a cross-platform solution will open up Blackberry’s opportunities.

 

Messaging

Chen is very happy over the launch of the multi-platform launch of BBM (BlackBerry Messaging).  It was the first time that BlackBerry tried to play with its Android and iOS neighbors, and it worked out quite nicely and generated some interest in BlackBerry.  They now have 45 million BlackBerry users and 40 million Android/iOS users, totaling 85 million customers using their messaging platform.  It currently does not producing any revenue, but in fact costing BlackBerry money, but Chen sees it as a long-term investment.

bbm-iphone-android

Devices

With the device end of BlackBerry’s business losing massive amounts of money, it would be easy for Chen to throw in the towel and get out of the phone business altogether, but he says:

“I am never going to give up designing phones.  I may not build it, but I’m going to design it.  I think it’s a very important thing.”  Chen also made it clear he is also sticking with BB10.

“The future phone is going to be cool and is going to be high-end.  For the low-end phones, I’m going to work with my partners to build and maybe, in some cases, design.  But they are all going to be BB10.  They are all going to be our brand.”

He also made it quite clear that the phone division has to be profitable and one way Chen is trying to limit their losses is by partnering with Foxconn to make their “emerging market” devices.  He would also like to partner with others for higher-end devices because, as he noted, Foxconn cannot go everywhere.

Chen hired Ron Louks to head their handset division and now believes that he has a good management team in their phone division.  Chen says, “I truly believe the phone is like the movie business, you are one hit away from being great again.”

 

QNX – Outside the Mobile Environment

Lastly, Chen believes that QNX is a very important part of BlackBerry’s future and is the bright spot for the company at this time.  It is already making money for BlackBerry, just not enough, but he believes there is a growing audience for the product.  Chen says that:

“QNX is a market leader in the automotive competitive industry — a lot of design wins, a lot of model cars, getting royalty, high-margin, but has been kept reasonably small.  I think that the whole vision of machine-to-machine mobile computing is going to be the future.  I think there are a lot of verticals that need QNX, and there are a lot of devices needing QNX outside of phones.”

Once there are enough QNX “wins” for the company, who knows how much money it will net for Blackberry – and, like Chen says, “when it comes to royalties, it’s pure margin.”

 

Summary

Chen said, plan and simple:

“My number-one objective is for the company to generate cash again — cash-flow positive — and start making money while investing in these areas we talked about.  Once we get there and we are getting a good engagement model in the regulated industry, after that I think then the opportunity really opens up.”

This “regulated industry” Chen talks about, “They will be the banks, the insurance companies, the health care, the governments, state and federal.”  Certainly consumers are still on their “radar,” but he believes that BlackBerry’s survival all rests on the regulated industry first.

BlackBerry believes that one of their problems with their newest BB10 smartphones was that they were not promoted properly, the devices were not stocked properly at the store level, and that the store employees were steering their potential Blackberry customers away from the BlackBerry devices toward the more popular Android and iOS devices. Chen said he has been made aware of this and that, “When I’m ready to make that move, we’re going to have another conversation.”

Chen also gave a shout-out and acknowledged the BlackBerry loyalists to “keep the faith,” and says that without them, his job would be “about 10 times more difficult.” He pulled out all of the stops when he said:

“I hate to use this as an example, because I’m not trying to imply anything. But when Apple ran into trouble, Steve Jobs went back to the company and he focused back on the loyalists.” Chen paraphrased a speech Steve gave when he returned to Apple: “I’m going to go back. I don’t have any announcement to make. I’m just going to say that my customers are important.”

He hated to do it, but then he did it anyway…pulled out the “Steve Jobs card.” Please let us know on our Google+ Page if you stand with BlackBerry, or could care less. Would you be interested in a BlackBerry device running Android. Do you think BlackBerry has any chance to survive or will they go way of the dinosaurs.

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