Summary of above interview:
In a recent interview with Reuters’ Rhonda Schaffler, Chen answered many questions regarding BlackBerry’s roadmap for the next few years. While he gave no dates except a mention of a November timeframe for new devices, Chen was confident and upbeat while remaining businesslike and realistic about BlackBerry’s plans and future. First of all, he said it’s not a ‘handset-only’ turnaround, and that being an end-to-end solution is more than a handset. Over and over again Chen stressed the integrated nature of the BlackBerry system. He emphasised that is is important to engage his Fortune 500 customer base, find out what their needs are and show how BlackBerry can continue to meet them, stating that BlackBerry is focused on applications and end-to-end mobile solutions, all geared to the needs of Enterprise. As Chen has met with customers around the world, he has gotten quite a bit of interest from them on BlackBerry’s roadmap. He was clear that some products ‘are a little way out’ – and he indicated the November timeframe. Chen reminded Schaffler that BlackBerry’s focus is on regulated industry (government, financial, healthcare, legal sectors) – those that are very security-minded – and targeted the CIO and boards concerned with risk management saying that data security and identity security are of very high concern.
Schaffler asked what the benchmark for handset sales is for this year and whether BlackBerry will hit that benchmark. Chen laughed and said that his benchmark isn’t volume of sales – that he told investors that “we need to make money in the handset business”. He reiterated that between now and 2016 BlackBerry looks to make money in the handset business. She then asked what would happen if BlackBerry couldn’t make money in handsets. Chen replied that they may have someone else make more and more of the handsets saying, “There has got to be a way to make handsets because our operating system and our software technology is so strong, if I just license software technology I would do well. We will be in the handset business – it depends on what level of integration.” He quoted current sales at 3.4M/quarter as a good level to stick with and looks to make money at that volume. When Schaffler asked Chen what could set back BlackBerry’s plans to make money in fy2016, Chen stated that it would be things like global market setbacks, currency market, etc.
The bottom line and take-away is that BlackBerry is working on a whole system – handset and server and BBM and QNX, end-to-end solutions, vertical solutions, and more. Chen emphasised that he wants to see the company become strong in the machine-to-machine world and notes that ‘everyone’ wants to get into that market. He said that BlackBerry is quite undervalued and acknowledged ‘issues’ over the past 2-3 years but pointed out that customers will like the more end-to-end, deeper stack than other ‘point to point’ solutions have. When asked about acquisitions, Chen answered that they’re looking at small (less than $100M) aquisitions in security, productivity, communication areas. He’s hoping to “fill the stack” with purpose rather than just buy attractive companies for revenue.
Asked about cost-cutting, Chen said that he was finishing off what had been already planned but was in the process of hiring sales, engineering and ‘customer engagement’/customer care people. While BlackBerry is diversifying in terms of locations for business, Waterloo is still headquarters. Regarding the T-Mobile partnership breaking up, Chen said that it was a business decision, not an emotional one, and that it would be ‘music to my ears’if we could work it out, but given T-Mobile’s consumer focus and BB’s enterprise focus and their clear decision not to sell BlackBerrys, BlackBerry will not be working with them in the near future.
Chen was open and realistic when he said that the toughest part of the turnaround is execution and convincing the market that BlackBerry has a very good plan and can execute it. “Getting to the customer on time is actually very very tough” but he said that once the customers hear BlackBerry’s plan, he said, they like it.
Several articles have recently appeared stating that Chen is talking about leaving the handset business “in a short time frame”. Nothing like this was said during the interview. It was interesting in its openness and we can see the confidence meshed with realism of the 164-day-old CEO. It will be interesting to follow Chen and BlackBerry as the year progresses.