BlackBerry would consider exiting smartphone hardware business if it remains unprofitable, its chief executive officer said. The head of the company is very interested in keeping the company afloat, so he is looking beyond the smartphone in general to other connected devices, which will become pervasive across different industries.
“If I cannot make money on handsets, I will not bein the handset business,” said John Chen in an interview with Reuters news-agency.
Back in its fiscal 2011 the now struggling BlackBerry sold 52.3 million smartphones, but in the most recent quarter the company only recognized shipment of two million devices. Needless to say that the company is not profitable these days, it is “losing money and burning cash”, according to its chief executive office. In March the company reported net loss of $423 for the quarter.
But if smartphones do not bring any profits to BlackBerry, maybe it is time to get rid of the handset business and concentrate on secure connections services, something that will truly be in demand in the coming years.
Mr. Chen said his long-term plans for BlackBerry included competing in the growing business of connecting different types of devices, including, but not limited to, kitchen appliances, automobiles, game consoles, smartphones, home appliances, medical devices and consumer electronics. Given the recent scandals with privacy amid surveillance by several governments, secure connectivity and secure device management will be crucial for tomorrow.
“We are not only interested in managing BlackBerry devices. We are interested in managing all devices that you would like to speak to each other,” said Mr. Chen, “To achieve our dream of being a major player in M2M requires more partnerships with others.”
The company has already begun to invest into technologies for the M2M [machine-to-machine] market. Moreover, in case it will be needed, BlackBerry will consider partnerships, mergers and acquisitions scenarios.
“We are building an engineering team on the service side that is focused on security,” said Mr. Chen. “We are building an engineering team on the device side that is focused on security. We will do some partnerships and we will probably, potentially do an M&A on security.”
While BlackBerry is determined not to lose focus on the corporate and other customers that helped it build its global influence, it looks like the new chief executive officer does not want to continue to spend on making the platform attractive to the consumer. Meanwhile, the success of Apple iPhone and Google Android were conditioned primarily by their orientation on the end-user.
KitGuru Says: High-ranking executives do not pre-announce plans while they are being executed. There are only two situations when CEOs share strategic plans: in case there is an important announcement incoming or in case the possible actions are only investigated. It remains to be seen what the current situation at BlackBerry is…