CEO John Chen Still Bullish on Blackberry Hardware

May 2, 2016

It seems like it was just yesterday, but John Chen actually became CEO of Blackberry over 2.5 years ago. In that time, Chen has claimed that he would shut down the hardware division of the Canadian company if it failed to turn itself around. Afterwards, it seems, he went bullish on phones. Even while retooling and spinning up an aggressive approach of making its services compatible with multiple mobile operating system, such as its BES server and Blackberry Messenger (BBM). Needless to say, it’s been tough to nail down exactly what Blackberry’s approach is; its strategy; its plans to do more than just survive, but to thrive once again. Tenacious as any company as ever been, the story of Blackberry is one of the longest tech company death watches I’ve ever seen.

Unlike some others, as a fan of all things tech and inherent product diversity in the marketplace, I have never had a desire for Blackberry to toss in the towel on hardware keyboards and go all-in, all-out on an exclusively touchscreen product line. I’ve been jonesing for a hardware keyboard as I’ve made several nearly unforgivable gaffs in the past year, all due to auto-correct. The issue is a major one, as I feel like autocorrect behavior differs from OS, to app, to custom keyboard, sometimes all on the same device. And as a lover of Windows Phone, I’m completely fine if a company relies more on building a solid OS with unilaterally supporting features for numerous use-cases, rather than leaning on a socket-based approach and currying favor with 3rd party app developers. The Blackberry Priv landed last year, possibly embracing the best of every approach imaginable in an effort to make the ultimate Bizarro phone. But its (ridiculous) price-point kept it out of the reach of a lot of fans who might have gotten onboard with Blackberry’s latest unique product approach.

As quarterly reports dribbled out from all of the tech giants over the last month, Chen gave himself yet another ultimatum (at the Q4 Blackberry earnings call on April 1st), which he’s done a few times in his tenure. The new timeline is for the hardware division to become a break-even business by this September. That’s six months; two fiscal quarters for that division’s products to earn revenue equal to its expenditures. Ultimatum is maybe too strong a word. Chen has shown that he is not ready to give up on the hardware business while there is at some tenuous indicators that it can return to being profitable. Every other area of Blackberry’s business is pointing upwards. It’s just this one nut that they need to crack. Right?

Today, at the Milken Institute Global Conference, a financial conference held out in LA, Chen was upbeat, indicating that Blackberry’s hardware business was very close to a turnaround. And maybe to the hardware division making making money or at least breaking even. But there are a couple of key problems with his six month outlook. The biggest one is that, with regards to Blackberry’s next two devices, the ones that might be able to aid in that turnaround, Chen indicated that they would not be available until end of summer/early fall for the first, and the end of February of 2017 for the second. It is not clear that this means that there is nothing else in the pipeline for earlier release, but it might, and that’s scary. How is the hardware division expected to break even on the strength of the Priv and the Passport, mainly, when uptake on those devices has been slow?

white-blackberry-bold-9700-profileI really miss my Blackberry devices. For the brief time that I was a T-Mobile customer, a Blackberry Bold 9780 was my lead smartphone. And I playbook-os2-downloadloved my Blackberry Playbook. It was one of the devices that was the hardest for me to let go of. And I’ve been riding the fence on buying a Priv now that (thank god) Newegg dropped the price on them down to $399. In fact, one of the best things Blackberry has going for it is that its devices are (now) reasonably priced, sold unlocked, and tuned to support GSM carriers. This makes them some of the most open and unencumbered devices, as far as purchasing baggage goes, available on the market today. And while I’ve gone to a “best, biggest, most storage, and ink” strategy in my personal phone lineup, I’m tired of my only choices being Nexus, Galaxy, and iPhone.

Here’s to John Chen and his endeavors. May they not wind up being the stuff of Quixotic mythology.

Video Source: Bloomberg YouTube Channel