“If I can make it [Android] secure, I will.”

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As BlackBerry fans, we’ve all been anticipating the earnings report and the call that took place at 10:00 EST this morning. I’m not going to offer a full summary of that call, but I will offer my opinion which is in a nutshell, that Chen’s plan is progressing and the most important metric is improving. A few highlights (numbers from Bloomberg) are that total revenue is down 32% to $658 million, handset revenue is down 31% to $263 million, and software revenue is up 153% to $137 million. Another big number (all other numbers from BlackBerry’s statements) that goes along with the software number is that BlackBerry brought in 2,600 new wins for EMM (BES) and 43% of those licenses are cross platform. (I believe this means that 43% of the customers are managing BlackBerry and non-BlackBerry devices with their BES servers, but I think it’s possible that it could somehow mean that 43% of the devices connected to the BES servers are not BlackBerry.)

Other key news from the call this morning is that BBRY acquired Watchdox to secure documents and collaboration with documents, and that BBRY contracted with Wistron and Compal to help them manufacture devices and further reduce BBRY’s liability in device manufacture, the biggest of which I assume, is inventory carrying costs. Lastly, BlackBerry ended the three months ending March 30th with $3.3 billion in cash and investments, which includes $1.6 billion in free cash and cash equivalents.

So as a BlackBerry fan, my take away from the earnings call is that Chen’s plan is working. There was recently a great article published by The Next Million where Chen was interviewed and another in that same issue that discussed turnarounds in general. I found these articles comforting regarding BlackBerry’s turnaround because it was emphasized that turnarounds take time; three years or more for a company to actually thrive again. So, Chen has been at the helm for almost two years and has made the company cash flow positive, and is now focused on stabilizing and strengthening revenues; he is right on track. Let’s not forget, he has done it before at Sybase.

I missed the earnings call but was able to watch a live interview of Chen with Emily Chang, a tech and media news anchor for Bloomberg West.

Here are some of the highlights:

• Software revenue up 153% to $137 million which is on-target for Chen’s goal of $500 million by March 2016.
• BBRY has reduced their investment in devices and increased investment in mobile security and privacy, in SW (assuming he means BES and probably BB10), in Internet of Things, specifically in connected cars, and related applications, and in sales (which I assume is EMM/BES sales to the enterprise).
• BBRY has “better traction with the carriers,” according to Chen.

But here are a few things Chen said that I found really fun.

When asked by Emily Chang if “BlackBerry will make an Android phone,” Chen said “When people ask me if I will ever build one, I say, If I can make it secure, I will.”

When Emily Chang asked Chen about acquisition offers at the current stock price, Chen said, “I’m not listening to any offers.”

When asked about whether the device business is a smart business for BlackBerry to be into, i.e., whether BlackBerry should be offering devices, Chen offered several comments but summed it up by saying, “…We’ll get our device business back on track.”

My take away on Chen’s first comment is that they’re looking into some type of play with the Android OS, but are not confident they can do it securely. I am very happy to hear about this hesitance as I firmly believe they don’t want to dilute their brand with an un-secure OS. John’s second comment is comforting as well, because he said it very firmly and this leads me to believe he is still confident in all his plans and the execution of them. Obviously, I’m also thrilled to know I will be able to continue to use BlackBerry branded handsets going forward; but that was never really in doubt.

I think Chen is generally celebrated by intelligent, institutional investors as being a straight shooter who has delivered on all the promises he made when he first took the helm and is meeting the objectives he set for BlackBerry’s turnaround, and I hope you’re as confident as I am in BlackBerry’s future!

james pisano

RIM/BB fan since 2009. Wouldn't consider entrusting my career, life or privacy to another platform. Foremost, I am a student of life. Some likes: longboarding, nature, Baltimore Orioles, technology, driving, music, reading and Taoism. Politically independent.

  • Anthony

    BlackBerry is a much better company today. They’re more diverse and hardware isn’t the only driver for the company. locco_smiley_10

    There’s definitely room for BlackBerry devices to be a profitable important part of the company. They actually have a large market of iPhone and android users they can woo!

    Next year Nokia will start making smartphones again. I think they won’t use android but they could license BlackBerry’s hypervisor solution to have access to android apps.

    BlackBerry device sales should start increasing because their reputation is improving. But, going into a carrier store their advertising still sucks. There’s no content on demo devices, no songs…pictures…etc locco_smiley_7

    • Agree on all counts, Anthony. Interesting perspective on Nokia.

      My feeling is device sales to consumers in developed markets (and elsewhere) will never improve until there is aggressive marketing, which is something Chen hasn’t focused on yet.

      He always strikes me as really smart and realistic. I’m sure he’s trying to solidify the BES/EMM revenue and get that going strong before he turns his attention to handsets. I really believe we’ll see some excellent marketing when the time comes.

      The only caveat is that I don’t believe BlackBerry will ever enjoy the cult-like following Apple has with consumers or the market share Android has. I do believe there is definitely significant room for growth in handset market share. I just think BlackBerry’s strengths are not as “sexy” as the Golly-Gee-Whiz stuff Android has or the dumbed-down-so-a-toddler-can-use-it UI and ecosystem that Apple has.

      Definitely, carriers will be a significant focus on any marketing efforts for handsets. I know Chen has been thinking about them and maybe the TMobile developments are indicative of things to come. I hope Verizon carries the Slider and eventually, the Passport.

  • jackielive

    Good news for BlackBerry think Chen was saying in one interview they were losing a billion at one point and he has progressively brought that amount down.
    I liked his surprise over the Android phone and his determination to put device sales to the fore.
    Today has been a funny day for me. I found out my local Council which receives almost a billion budget has stopped using BlackBerry as a secure device and is using iPhone now. They have cut almost 6 thousand jobs with austerity but can afford iphones. How they are making them secure is anyone’s guess.
    Brings me to my second point. A council person received there nice new iPhone 6 today and within minutes wanted to know what I had done to cock it up. Her home screen was zoomed out so far you couldn’t see anything. She couldn’t put her password in. I did a quick Google search on my trusty passport to find out this is a well known iPhone bug until you switch off the zoom in general settings. Despite the nice size and shiny screen it’s still a one trick bore of in and out the homescreen button the hokey cokey dance of death as far as I’m concerned. I played with it for about 5 mins till I got bored. Showed her my BlackBerry Passport multi tasking capabilities. Tried to clear as much of the ads her iPhone seemed to already be swamped with (gave up quick) and left it for her to pick up when I fixed the zoom issue.
    Despite the flaws UTB consistently point out here on the other devices I a was pleased to play with a £700 pile of crap for 5 mins to see for myself.

    Hope Chen and BlackBerry stick to their guns and we have BlackBerry devices to choose from for at least the remainder of my lifetime.

    I know one of you’re sayings is come back to black but after 5 mins with an iPhone 6 pleased to say I never left.

    • Thanks so much for your comments jackielive! I agree about the lack of functionality of iOS. Those phones are such toys.

      That’s very interesting about your council and you’ve peaked my curiosity about what you do.

      By the way, would you be interested in sharing your opinions and experiences in a blog? You could write it yourself or maybe I could interview you.

  • deltact

    Agreed that Chen is an intelligent straight shooter, but also very realistic. He’s not going to immediately preclude all possibility of building an Android device just because it’s “not a BlackBerry”. If he can make it secure (uncertain at this point) and profitable (the partnerships with Wistron and Compal will help here), then why not? These devices are more likely to take away from existing Android marketshare, and any additional profit can be redirected to areas like BES, IoT and BB10.

  • bambinoitaliano

    I don’t think BlackBerry can, will and should ever be practicing Apple cult like business practice. BlackBerry sell genuine mobile phone that actually serve as a communication device. Apple is selling a brand, a design of shiny object. Functionality is never a concern for Apple’s Iphone. Topics of conversation is. Strip away all those apps, there’s not much to do with. If you pare down the usage of mobile phone as a strictly useful communication function, millions upon millions of people do not really need a smart phone. Apple and Samsung manage to sell phones to majority when most of them do not need one. BlackBerry could never be in that market pretending people needing all those bells and whistles other than a solid communication device. The general consumers market is not their field to compete in. Not when majority of the consumers treat communication and security as secondary to the functionality of apps on a mobile device.

  • BB Racer !!

    Nice over view post !!! ” IF I Could Secure Android ” key statement by JChen. When BlackBerry does build a secured android it can therefore brand it as ” BlackBerry Android Secured Ready ” ( BAS Ready ) phones. Now Nokia and others can licence the BAS Ready phones for a monthly activation fee . Heck BlackBerry can generate easily over a $1B in fees per year ( BAS Ready Fees) .

    • That’s interesting BBRacer… who would pay the fee, the manufacturer, right? Not the carrier? And they would be paying BlackBerry for the use of the software needed to secure Android… I suppose it wouldn’t just be security, it would be availability and efficiency too, assuming things like the HUB and file manager would be included…

      Interesting!

  • jackielive

    Hey James, thanks for the offer. I will happily dip in here when I can. I was a child care social worker by trade. Currently retired. Took the voluntary redundancy my Council was offering with provisos of course.
    I was an active trade unionist and have been using the BlackBerry devices to keep thousands of trade union members involved, active and aware of their rights, freedoms at work. Not as free or full of rights as you might imagine.
    We are cannon fodder and dispensible and the world of work would hope a cheap commodity.
    The BlackBerry has helped me formulate responses on the hoof at short notice to a million important things from legal, policy and consultational change. None of it in the initial blue print stage in our best interests.
    Groups of members in SMS, email, facebook, phone only, BBM, has brought us all closer together. The more informed and aware you are, the more likely you’ll feel strongly for change.

    Keeping track and updating 6 thousand members in my own town, 200 hundred thousand regionally as a Regional representative was a breeze on any of the BlackBerry devices I’ve owned since 2006. My first shot into the mobile device market. Couldn’t believe what you could achieve on a Pearl. Have been hooked ever since. A BlackBerry device is a machine like any other gadget. It has to work for you, make things easier, add something to the daily tasks that need doing/sorting.
    BlackBerry have always got that, as end users we’ve always had to make a huge effort to get to know how to make the device work for us best.
    Not all BlackBerry users get that one.

    I’m still hooked. I will continue to give BlackBerry a hard time when they are making it difficult for the end user and feel happy when the experience is giving me the desired results.
    I will play my part and continue to learn all I can about what my BlackBerry does/can do.

    If I was still in the world of work, part of me would be glad the opposition had gone Apple, they were a piece of cake to take apart when we all had BlackBerry’s. Now they got “Toys” to do a job, they should be ” a day at the park, a walk on the beach”

    I’m content to let my BlackBerry organise my travel now and take me to places I want to see, collecting memories in picture but mainly video form and use Story Maker to document my new travels in life.

  • Akinni

    Great comments from all of you. Jackielive contributions should be pursued and give wide publicity in BlackBerry Blog.

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