John Chen, The Truth About Handsets

 

At a media Q&A following the BlackBerry’s Security Summit, John Chen explained the truth behind the device business. The truth being, they don’t matter in the bigger picture. Obviously tired of the media’s strong, if not sole, focus on BlackBerry’s handset business, John Chen commented on how the media have “conditioned [themselves] to ask me that question.”

Chen explained in greater detail, “If I come to you with a billion dollar software business with a 70% margin, you’d never ask me about handsets” further fleshing out what strategies like the new mobility division means to BlackBerry and it’s handset division.

“What we’ve done with this turnaround is amazing.” And it is. John Chen and his team of turnaround artists have done more than just save the company, they pointed it in a whole new, very profitable direction. They’ve taken what was once a hardware company with amazing software, and turned it in to a software company with amazing hardware.

With BlackBerry’s focus on software, and substantial growth in that area, BlackBerry is ensuring that they will be around for a long time to come. Unfortunately, media isn’t looking at it that way. They are still looking at BlackBerry as a phone company, which they simply aren’t. As BlackBerry turns in record growth in it’s software division, media only looks at the drop in device sales. This may just change soon. As we spoke about after the last earning’s call, through the creation of the Mobility segment, John Chen has essentially removed the need to report device sales figures moving forward. This segment of business will now include the licensing of BlackBerry’s patents, which should be extremely profitable to BlackBerry. Combine that with BlackBerry’s current device strategy, of utilizing outside manufacturers to deliver BlackBerry phones, this segment is sure to be profitable soon, regardless of the quantity of devices sold. It is an amazing concept, so amazing that I don’t think many understand what has taken place.

Chen again stated his oft quoted message “If [it] can’t make money, I have a fiduciary responsibility to my investors” and yet, with what we know, the tone of this message is very different than what we’ve experienced before. Chen is confident his moves will keep BlackBerry in the device business. This no longer comes across as a possible reality of losing the handset business, this is a promise to investors that this segment will indeed make money.

John Chen is a winner, and he took the position at BlackBerry to prove that he could turn it around and bring BlackBerry back to it’s former glory. Chen does not want to be the CEO that loses the device business. Since the beginning, John Chen has stated BlackBerry’s need to offer devices so that they could offer their customer’s a complete end to end solution. I would take it even further than this. I would bet that Chen would see losing the device business as a loss. And we know that John Chen is not a man that loses.

Chen has said that he will turn around the company, and he is doing so. Chen has said that he is committed to the hardware business, and even though many could see no way that this would be possible, he has shown us how his strategy will make that happen.

When all is said and done, have no doubt that we will still be buying BlackBerry phones as long as BlackBerry achieves profitability. With Chen being ultimately responsible for BlackBerry hitting that profit, I have no doubt that there is no longer any risk of losing BlackBerry devices.

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source

Brad

BlackBerry Elite
Founder & Owner of UTB Blogs and UTB Geek.
When I’m not talking or writing about BlackBerry, you’ll find me using my BlackBerry.

  • ClarkAaron27

    Great write up! BlackBerry will be around forever. #Blackerry4Life

  • Nayalm

    What in my humble opinion understand from John Chen is:
    -Vulnerability and bugs got other ecosystems and OS’s by the neck and balls.
    -They’re not even reliable for simple tasks without third-party applications.
    -Hardware is worth noting without a powerful Operating System/Ecosystem.
    -BlackBerry already got both BB10 and handsets + Android.
    Soon OEMs will realize that and we will see big brands lining up to pick a BlackBerry hardware or software technology that suits their needs.
    Somehow News and Media are playing in John Chen’s hand without knowing.

    Mobility Division = stock in every OEM in the handset business.
    And that’s imho

  • jubatus

    Their is only was to change the perception , go back to your roots. Chen should change the name back to its original name. Blackberry is a tarnished name because of the media and past failures. Call the device something else, that the only way to get people to the the best phones in the world. Thor’s mistake was to change RIM to blackberry.

  • Lyt

    @martinbbm75
    “Shallow” is the only word to describe “Media” – CANNOT SEE THE BIG PICTURE.

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