BlackBerry Exploring Strategic Alternatives


Struggling smartphone manufacturer BlackBerry is exploring strategic alternatives to enhance value and boost BlackBerry 10 adoption. The company today announced that it has formed a special committee of the board comprised of Barbara Stymiest, Thorsten Heins, Richard Lynch and Bert Nordberg, chaired by Timothy Dattels to explore strategic alternatives which include possible joint ventures, strategic partnerships or alliances, a sale or other possible transactions. This is the first time BlackBerry publicly acknowledged that company is looking at other options. The company also announced that board member Prem Watsa resigned from the board “due to potential conflicts that may arise during the process.” BlackBerry started smartphone revolution but lost market share since the arrival of Apple’s iPhone and Google’s Android platform. To bring back old glory days, the canadian company put all its efforts on BlackBerry 10 platform. After facing numerous delays it officially launched BlackBerry 10 back in January this year. The initial demand exceeded expectations but its market share continues to lag, and the company warned of future losses in its FYQ1 2014 Earnings. The company’s shares have fallen more than 19% this year and market value has fallen to $4.8 billion. The sales of flagship smartphones BlackBerry Z10 and BlackBerry Q10 are getting worse even with price reductions. BlackBerry Q5 , on the other hand is too expensive for a mid range smartphone. The vast majority of past BlackBerry owners were using BlackBerry Curve and were hoping to upgrade to a sub $300 BlackBerry 10 smartphone that never came (and will not come in near future). BlackBerry’s next smartphone release is rumored to be a flagship one with BlackBerry Z30 featuring 5-inch 720p display and BlackBerry 10.2 OS. Hence the decline in BlackBerry subscribers because they either moved to Android or Windows Phone for a sub $300 smartphone. Now focusing on strategic alternatives, BlackBerry has few options available to them to survive long term. BlackBerry can go private that would give the board breathing room to fix its problems out of the public eye. Prem Watsa stepping down from board doesn’t necessarily mean that he’s interested in buying the company but he could be a bidder as he believes that BlackBerry can turn itself around. The company can also look at options such as licensing BlackBerry 10 operating system and joint partnerships with hardware manufacturer like Lenovo, Huawei, Amazon and HTC. The company can also be sold for parts. BlackBerry has a robust patent portfolio which is valued at $2 billion. Its hardware portfolio is not as worth as patents but can be sold for good price. The final option available is an outright sale of the company. There are several potential buyers like Microsoft, Amazon, Lenovo, Huawei and Samsung. The big problem in an outright sale is that the Canadian government has signaled that it will not allow a sale to a foreign entity. There can be no assurance that today’s announcement will result in any transaction but it shows that BlackBerry is willing to explore options like sale of the company. JP Morgan Chase & Co. is serving as BlackBerry’s financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP and Torys LLP are legal advisers. BlackBerry can still make a comeback but it will be a lengthy process. BlackBerry shares were +11% ($10.81) at the time of writing. Stay tuned for more updates or follow @harrym20 on Twitter.

Update : A new report from Bloomberg suggest that BlackBerry CEO Thorsten Heins will make $55.6 million if he sells the company and is ousted.

Update : According to a new report from WSJ, BlackBerry is pushing for a speedy sale by November 2013. It looks like BlackBerry sale is inevitable.

Update : Citing unnamed sources, The Sunday Times reported that Prem Watsa aka Canada’s Warren Buffet is closing in on a rescue deal for BlackBerry. Watsa’s company, Fairfax Financial Holdings, is BlackBerry’s biggest shareholder with 10% stake. Going private is only good if BlackBerry stays as an individual company. New rumors are suggesting that BlackBerry will split into three companies – BBM, BES and BDS (BlackBerry Device Services). After the split, the individual company can be sold to highest bidders.

Update : According to Bloomberg, BlackBerry has registered a meeting with lawmakers to discuss the Investment Canada Act, which sets rules for foreign acquisition of local companies.

Update : BlackBerry is holding a press event in Malaysia on September 18th. It could be for any of the following reasons :

1. BlackBerry Z30 launch

2. Cross-platform BBM app launch

3. BlackBerry 9720 launch

Update : According to Reuters, a handful of potential bidders, including private equity firms are interested in parts of BlackBerry rather than the whole company. The private equity firms are mostly interested in businesses such as Blackberry 10 operating system and patents related to BlackBerry keyboard. However, there is one canadian pension fund interested to team up with an investor to buy the whole company.

Update : BlackBerry is preparing to slash workforce by up to 40% by the end of this year, according to a report from The Wall Street Journal . The layoffs will cut across all departments affecting several thousand employees.

Update : According to Bloomberg, the inventory of unsold BlackBerry smartphones is approaching $1 billion mark, raising the chance that the company will make a writedown when it posts Q2 FY2014 earnings on September 27th.

Update : BlackBerry announced its Preliminary Q2 Earnings on September 20th and the company’s finances doesn’t look good. It expects GAAP net operating loss of approx $950 million to $995 million. The loss includes a primarily non cash, pre-tax inventory charge of $930 million to $960 million and a pre-tax restructuring charge of $72 million. BlackBerry is expected to report revenue of approx $1.6 billion with sales of approx 3.7 million smartphones. Future smartphone portfolio will transition from six devices to four including two high end devices and two entry level devices. The company also announces its restructuring plans, including reduction of approx 4500 employees and targets reduction of its operating expenditures by approx 50% by the end of Q1 FY2015.

Update : After the disastrous Q2 Preliminary Earnings release, a new report from The New York Times says that BlackBerry co-founder Mike Lazaridis has reached out to private equity firms about a possible bid for the canadian company. Mr. Lazaridis has separately approached the Blackstone Group and the Carlyle Group about making an offer for BlackBerry.

Update : According to a The Wall Street Journal report, BlackBerry purchased a corporate jet in July. The company purchased a 2006 Bombardier Global Express in July, according to Canadian aircraft-registry records. Similar planes are listed for sale for about $25 million to $29 million on a used aircraft marketing website.

Update : BlackBerry officially announced that they have signed an initial agreement with a consortium led by Fairfax Financial to sell itself for $4.7 billion. The two companies signed a letter of intent that is contingent on due diligence. BlackBerry shareholders would receive U.S. $9 per share in cash Transaction valued at approximately U.S. $4.7 billion. Consortium permitted 6 weeks to conduct due diligence. The due diligence and negotiations are expected to be completed by November 4th, during which BlackBerry can shop around for better offers. Breaking up the current agreement would result in BlackBerry paying Fairfax $0.30 per share fee.

Update : BlackBerry officially announced that more than 25000 BES (BlackBerry Enterprise Service) 10 commercial and test servers have been installed globally. More than one third (34) of FTSE 100 companies have installed BES 10 for either commercial or test purposes. Major carriers EE, Vodafone and O2 are all now supporting BES 10.

Update : BlackBerry cancels the Earnings call scheduled for September 27th to discuss the company’s quarterly financial results because of a conditional buy out offer from Fairfax Financial. The quarterly results will still be released but the call with analysts and investors was called off.

Update : According to a new report, Blackberry manufacturing partner Jabil Circuit is considering ending its business relationship with the struggling smartphone pioneer.

Update : BlackBerry CEO Thorsten Heins will get compensation of as much as $55.6 million if there is a change of control at BlackBerry (or bought by Fairfax Financial), up from $18.9 million previously, according to a securities filing on May 21. The $55.6 million is based on the BlackBerry’s share price in early march, and the stock has fallen by more than a third since then, which means the compensation package will be worth less.

Update : BlackBerry announced Earnings for Q2 FY2014. They are as bad as everyone expected. Revenue for the quarter was about $1.6 billion, a 49 percent drop from $3.1 billion it registered in previous quarter. The company’s adjusted loss from continuing operations was $248 million, or 47 cents a share. The GAAP loss was $965 million, including inventory charge of $934 million (Z10 inventory charge) and restructuring charge of $72 million. The total of cash reserve was $2.6 billion as of August 31st 2013. During the second quarter the company recognized hardware revenue on approximately 3.7 million BlackBerry smartphones (most of them were BlackBerry 7 smartphones).

Update : According to Computer World, upcoming Gartner report will recommend that enterprise users quickly find alternative to BlackBerry smartphones and servers.

Update : BlackBerry 10 and BES 10 is the first mobile platform to get an approval from NATO for classified communications up to the level of ‘Restricted’.

Update : According to a new report from Reuters, BlackBerry is in talks with Cisco Systems, Google Inc and SAP about selling them all or parts of itself.

Update : Kahn Swick & Foti, LLC and KSF partner has filed a securities class action lawsuit against BlackBerry in United States District Court on behalf of purchasers of BBRY common stock between Sep 27th 2012 and Sep 20th 2013.

Update : BlackBerry has settled its lawsuit against Kik Interactive over instant messaging app Kik Messenger. Terms of the agreement were not disclosed.

Update : According to Financial Post, Apple has hosted a recruitment event in Cambridge, Ontario to poach BlackBerry workers in Waterloo region. According to a LinkedIn invite, most positions will be based in Cupertino, California.

Update : A group of software designers responsible for BlackBerry 10 UI have left the struggling canadian manufacturer to set up their own company Topp, a digital design studio focusing on mobile, automotive, consumer electronics and retail sectors.

Update : BlackBerry is developing a simple, easy to use Cloud Service to manage users and apps on iOS, Android and BlackBerry devices.

Update : According to a SEC filing, Mike Lazaridis and Doug Fregin are considering to buy out BlackBerry’s remaining shares that they don’t own.

Update : Struggling smartphone manufacturer has decided to publish an open letter to reassure customers about its future. “These are no doubt challenging times for us and we don’t underestimate the situation or ignore the challenges,” the letter says. “We are making difficult changes necessary to strengthen BlackBerry.

Update : According to The Wall Street Journal report, chinese manufacturer Lenovo is considering the purchase of BlackBerry.

Update : According to a new report, the canadian prime minister says that the government will weigh security concerns on any BlackBerry deal.

Update : According to a new report from Yankee Group, BlackBerry smartphones are outselling Motorola and HTC ones. This statistics is based on the quarterly earnings reports.

Update : According to a new Reuters report, Former Apple CEO John Sculley is exploring a bit for struggling canadian smartphone manufacturer BlackBerry.

Update : Facebook is the latest company interested in buying BlackBerry. According to a WSJ report, the executives from the two company met in California to discuss a possible deal.

Update : According to a new report from WSJ, Cerberus Capital Management, BlackBerry co-founders (Mike Lazaridis and Doug Fregin) and Qualcomm are in talks to jointly pursue a bid for BlackBerry.

Update : According to a Reuters report, Fairfax Financial Holdings is struggling to raise financing for its $4.7 billion bid for BlackBerry Ltd, with several large banks declining to participate in the takeover.

Update : BlackBerry has abandoned its plans to sell itself and instead will sell $1 billion of convertible debt to Fairfax Financial and other institutional investors. John Chen will act as a interim CEO of the struggling canadian company. Investors in the $1 billion debt sale include MacKenzie Financial Corp., Markel Corp., and Canso Investment Counsel Ltd. Canso is investing $300 million, Fairfax is putting in $250 million, MacKenzie is contributing $200 million, Markel and Qatar Holdings are each adding $100 million.

Update : According to a Reuters report, BlackBerry has no plans to shut down its loss-making handset business. “I know we have enough ingredients to build a long-term sustainable business,” incoming interim Chief Executive John Chen said in a telephone interview.

Update : FairFax CEO Prem Watsa expects struggling smartphone manufacturer BlackBerry to turnaround in next six quarters. “We went with the idea that the next three or four or six quarters are going to be tough,” Watsa said in an interview. “We expect the cash to stabilise somewhere there and then pick up – and finance it with enough cash to give us a long runway.” The new CEO John Chen plans to overhaul the company so it can survive in the long run, rather than preparing it for a fire sale. He sees a lot of assets inside BlackBerry – its enterprise software, network, patent portfolio and BBM. Heins, who was CEO since January 2012, was in line to get a $22 million payout in the event of termination, including $16.1 million in stock, the company said in proxy filing earlier this year. The shares have fallen about 50 percent since March, when the package was calculated. Taking into account that decline, Heins is now eligible for $14 million.

Update : In a letter sent to employees earlier this week, outgoing CEO Thorsten Heins thanked colleagues and said BlackBerry is in capable hands. “You can continue to count me as BlackBerry’s biggest fan,”Heins wrote in the letter. “Please know that I will be cheering from the sidelines.”

Update : According to a Bloomberg report, BlackBerry’s new Interim CEO John Chen will get a pay package of up to $88 million. Chen will be eligible for $1 million in base salary and a performance bonus of $2 million. He will also be awarded 13 million shares that will vest over the next five years. If Chen’s employment is terminated without cause, he will receive his salary for the remainder of that year, plus two times his base salary and bonus.

Update : Below is a message from John S. Chen, Executive Chair and CEO of BlackBerry.

To our BlackBerry Community,

As you know, this is a time of significant change at BlackBerry as we accelerate our efforts to transform our business.

I know there has been a lot said about BlackBerry, but let me remind you that at BlackBerry, we are not dwelling on the past. We are looking towards the future.

We Are Committed to Reclaiming our Success

We have begun moving the company to embrace a multi-platform, BYOD world by adopting a new mobility management platform and a new device strategy. We are also leveraging our tremendous assets, including BBM, our network and QNX. While we are proud of these accomplishments, we know there is more work to be done.

I know that it’s going to take time, discipline and tough decisions to reclaim BlackBerry’s success and we are ready for that challenge.

Our Commitment to our Customers Remains Unchanged

We remain committed to delivering high quality products and services to the millions of people who rely on us globally. We also want our customers to know that BlackBerry has significant financial strength for the long-haul.

I believe in the value of this brand. With the right team and right strategy in place, I am confident that we will rebuild BlackBerry for the benefit of all of our constituencies.

We are Excited for the Future and you Should Be Too

Thank you for your strong support and continued commitment.


John S. Chen

Executive Chair and CEO

Update : BlackBerry officially announced that as part of the reorganization of BlackBerry, Kristian Tear, the company’s Chief Operating Officer, and Frank Boulben, the Chief Marketing Officer, will leave the struggling company. It also announced that James Yersh will replace Brian Bidulka as Chief Financial Officer. Bidulka will stay on as a special adviser to the CEO for the remainder of the fiscal year to assist with the transition. “I thank Kristian and Frank for their efforts on behalf of BlackBerry. I look forward to working more directly with the talented teams of engineers, and the sales and marketing teams around the world to facilitate the BlackBerry turn-around and to drive innovation,” says BlackBerry CEO John Chen.

Update : According to a WSJ report, Blackberry’s outgoing executives will earn $6.8 million in severance package. Mr. Boulben will receive $2.3 million, and Mr. Tear will receive an estimated $1.5 million based upon SEC filings and the current value of BlackBerry’s stock. Mr. Bidulka, who will stay on as an adviser for the rest of the year, will receive $3 million which includes two years of his salary worth $1.2 million, stock options and retirement savings.

Update : John Chen, Interim CEO of BlackBerry, sent an open letter to BlackBerry customers to set the record straight about the hype from media and competitors. John reassures enterprise customers that BlackBerry is here to stay, and the investment made in infrastructure and solutions are safe. The full extract of the open letter is as follows.


Update : According to a new Nextgov report, Pentagon is withdrawing support for iPhone and Android based devices and forcing workers to use BlackBerry smartphones. The Defense Department is building a new mobile device management system to monitor government-issued consumer smartphones on military networks. According to DISA approval documents, only BlackBerry phones and Playbook tablets have an “authority to operate,” or ATO, on Defense networks – not Android, Apple or any other device lines. It looks like BlackBerry CEO’s open letter has reassured enterprise customers that BlackBerry is here to stay.

Update : The Interim CEO recently appointed to turnaround BlackBerry’s fortunes is in it for the long haul, says the company’s largest shareholder Prem Watsa. John Chen, a turnaround specialist with Sybase in the late 1990s, was brought in as Interim CEO to replace Thorsten Heins. “John’s committed for the long haul, he’s an exceptional leader, he’s going to do very well,” Watsa told Reuters in a telephone interview and described BlackBerry as an iconic company that deserves to succeed. “In any of my investments we always look at the leadership, in this case it’s John Chen, he’s an outstanding leader,” Watsa said, adding that Chen had already made “some very significant changes” at BlackBerry. “We think BlackBerry is an iconic company, an iconic brand, it’s known worldwide.. It’s a company that deserves to exist and with John Chen it will.”

Update : According to a Business Week report by Vincent Washington, Justin Bieber asked for $200,000 (and 20 devices) to represent BlackBerry and become a brand ambassador but RIM executives laughed at him and rejected his idea without giving any thought to the offer. Not sure if this would’ve made a huge difference but it was definitely an opportunity missed by BlackBerry management.

Update : In response to Justin Bieber story, Nokia US have tweeted Justin Bieber offering him 20 Lumia smartphones. This Nokia v Blackberry Twitter war is so hilarious.


Update : According to a new WSJ report, two senior executives will soon be leaving BlackBerry in the coming weeks. Chris Wormald, Head of BlackBerry’s mergers and acquisitions, will be leaving the struggling company by the end of December, while Rick Costanzo, executive vice president of global sales, will leave early next year.

Update : BlackBerry has officially announced that PSA Peugeot Citroen will deploy 10,000 BlackBerry Z10 smartphones for its operations in France and Spain, and is migrating to BlackBerry’s award-winning Enterprise Mobility Management (EMM) solution – BlackBerry Enterprise Service 10 (BES10). There are currently 30,000 BES10 commercial and test servers installed around the world.

Update : Former SAP Executive John Sims will join BlackBerry in January as head of its global enterprise services business. “I am pleased to welcome such a seasoned executive as John to BlackBerry to help lead our key business operations through our ongoing reorganization and transition,” said John Chen, CEO of BlackBerry. “His extensive experience in transforming businesses, redefining brands and motivating teams will be a tremendous asset to BlackBerry as we reshape the Company to be more nimble and focused. The changes we are making demonstrate our commitment to innovating for current customers who count on BlackBerry, and the new users who are just learning how powerful and compelling the BlackBerry 10 platform can be. John will be central to all of those efforts.”

Update : BlackBerry has officially announced two more executive appointments that strengthen the struggling company’s strategy, marketing and operations. James S. Mackay was appointed new Executive Vice President for Corporate Development and Strategic Planning. Mark Wilson was named Senior Vice President of Marketing and brings extensive experience building brand preference and driving integrated marketing for a number of well known companies.

Update : BlackBerry has reported another round of losses during its third quarter earnings for fiscal year 2014. The company reported a loss of $4.4 billion on revenue of $1.2 billion (on GAAP basis). Its adjusted losses from continuing operations hit $354 million, or $0.67 per share. The loss was the result of a huge $2.7 billion inventory charge and another $266 million restructuring charge. Analysts were expecting a loss of $0.43 per share on revenue of $1.66 billion. The shares of BlackBerry tumbled nearly 7% in pre-market trading before surging back. During the third quarter 4.3 million BlackBerry smartphones were sold to end customers of which 3.2 million were BlackBerry 7 devices. The total of cash and investment balance now stands at $3.2 billion as of November 30, compared to $2.6 billion at the end of the previous quarter. Cash flow used in operations in the third quarter was $77 million. BlackBerry also announced that it will focus on services and software business, while establishing a more efficient business model for the hardware business. There are over 30,000 commercial and test servers installed to date, up from 25,000 in September 2013. BlackBerry remains a mobile device management leader with global enterprise customer base exceeding 80,000. On to BBM figures, there are over 40 million newly registered iOS/Android users in the last 60 days. Over 250,000 BBM Channels were created since launch. BBM is the most secure mobile messaging service for use in regulated enterprises. “With the operational and organizational changes we have announced, BlackBerry has established a clear roadmap that will allow it to target a return to improved financial performance in the coming year,” said John Chen, CEO of BlackBerry. “While our Enterprise Services, Messaging and QNX Embedded businesses are already well-positioned to compete in their markets, the most immediate challenge for the Company is how to transition the Devices operations to a more profitable business model. We have accomplished a lot in the past 45 days, but still have significant work ahead of us as we target improved financial performance next year. However, the Company is financially strong, has a broad and trusted product portfolio to work with, a talented employee base and a new leadership team dedicated to implementing our new roadmap.”

“This partnership demonstrates BlackBerry’s commitment to the device market for the long-term and our determination to remain the innovation leader in secure end-to-end mobile solutions,” said Mr Chen. “Partnering with Foxconn allows BlackBerry to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management – while simultaneously addressing fast-growing markets leveraging Foxconn’s scale and efficiency that will allow us to compete more effectively.”

Blackberry has also announced that it has entered into a five year strategic partnership with Foxconn to develop and manufacture BlackBerry products at facilities in Indonesia and Mexico. The Canadian company will own all of its intellectual property and perform product assurance through the Foxconn partnership. The initial focus of the partnership will be on a low-end BlackBerry smartphone (codenamed Jakarta) for Indonesia and other fast growing markets. It is expected to launch by the end of Q1 2014.

Update : After announcing FY2014 Q3 earnings, BlackBerry CEO John Chen sent out a letter to employees explaining the strategy for future of BlackBerry. He acknowledges the depth of the challenges that the struggling company is facing in near future. Mr Chen said he will soon be bringing on a new head for the hardware business and urges employees to enjoy some time with loved ones and come back energized and focused in the new year.

At today’s Global Town Hall, I talked a bit about the state of BlackBerry and the changes we’re making to address pressing challenges.

A Tough Quarter

The overall earnings numbers this quarter are not good. BlackBerry will take a primarily non-cash, pre-tax charge against inventory and supply commitments of approximately $1.6 billion. In plain terms, we are acknowledging that we have inventory that is losing value by the day – devices that aren’t selling and warehoused components to produce even more in-market devices. This contributed significantly to a loss of $4.4 billion in this quarter.

Focusing Our Hardware Talent

This inventory write down points to a pressing challenge: how to profit from BlackBerry hardware, while reducing the risk of too much – or too little – inventory. To do this, we must focus our business on what we do well while leveraging the capabilities of our partners.

This is why today we announced we have established a five-year partnership with Foxconn, the world’s largest manufacturer of electronic products and components. They know how to manage supply chains and they have remarkable capabilities to get new products to market quickly.

With this partnership, BlackBerry will focus its resources to serve customers who value advanced security. In other words, we will continue to focus on what we do best – iconic design, world-class security, software development and enterprise mobility management.

With Foxconn’s scale and efficiency, BlackBerry can also compete more effectively in other markets. The initial focus of the Foxconn partnership will be a smartphone for Indonesia and other fast-growing markets in early 2014.

We are working on recruiting a head of our Devices business and I look forward to introducing him to you soon. I am confident that he will continue to focus our teams on areas where BlackBerry can deliver maximum value to our customers.

Capitalizing on Opportunities

It’s important to remember our operating units continue to have significant strengths and opportunities:

BlackBerry remains a leader in secure enterprise mobile device management, with a global enterprise customer base exceeding 80,000. We continue to work to shift this base to BlackBerry 10. BES 10 commercial and test server installs have increased to over 30,000, up from 25,000 in September 2013.
QNX is a leader in the automotive sector; its technology is used in more vehicle models (200+) and by more automakers and suppliers than all other platforms combined. QNX will unveil new technology in automotive and cloud services at the 2014 International Consumer Electronics Show in January.
BlackBerry is a pioneer in mobile messaging with BBM. With the launch of multi-platform BBM, we’ve seen over 40 million newly registered iOS/Android users. More than a dozen Android OEMs plan to preload BBM, including most recently LG. More importantly, as we focus on monetizing BBM, over 250,000 BBM Channels have been created by a global user base, including large brands such as Coke Indonesia and USA Today. BBM is also the most secure mobile messaging service for use in regulated enterprises.

We have also increased our cash position to $3.2 billion, meaning we have the ability to make strategic investments in areas where we think we can grow and profit.


Turning a company around is hard work. I appreciate everyone’s commitment over the last year and I ask that you continue to work together to help move BlackBerry forward. I know that if we focus on what’s important and continually improve the way we approach our business, the quarterly results will take care of themselves. We’re bringing together a solid leadership team and we’re already making the kinds of changes necessary to move our business to profitability.

As we move into the holidays, I encourage you to enjoy some time with the people you care about and come back energized and focused in the new year. We have challenges ahead of us, but if we pull together and stay focused on our customers, we will succeed.


John Chen
Chairman and CEO

Update : According to the Managing Director of BlackBerry India, BlackBerry will support the legacy BlackBerry devices indefinitely. “BlackBerry intends to support the BlackBerry operating system indefinitely“, he said in an interview with DNA India.

Update : According to a new report from Bloomberg, BlackBerry will return to its keyboard roots under the new CEO.
“I personally love the keyboards,” Chen said in an interview with Bloomberg TV at CES 2014 in Las Vegas. He added, “In the future, the company’s phones will “predominantly” have physical keyboards rather than touch screen phones. “Foxconn can be a really great partner, not only to eliminate my inventory risk, but also their ability to penetrate various different markets, call it the developing and emerging markets,” he said.

Update : BlackBerry has appointed a former HTC and Sony Ericsson executive Ron Louks as the head of device business. “Ron’s a very creative guy,” Chen said. “I think he’s more in touch with not only the technology and design to make a phone great but how people like the phone.”

Update : In a recent interview with Re/code, BlackBerry CEO likens the struggling Canadian company to a patient in serious need of medical attention. “Any normal exec or CEO would have probably said ‘I want a safer, easier job.’ I am abnormal.” he added. The first key to BlackBerry’s turnaround is to take BlackBerry back to its roots serving enterprise business since they are the ones that will bring more revenues. “I think I am going to sell the server first,” Chen said. “The server will lead the device sale.” Chen also wants BlackBerry to get closer to customers. As part of that plan, BlackBerry will open a major sales office near Wall Street in New York, a security research facility near federal government customers in Washington and a Bay Area-based engineering office, he said. “Over time I might build some more,” Chen added. One area where Chen isn’t spending much time is looking back at how BlackBerry got in the mess it is in. “How you get sick is not the concern of the doctor,” Chen said. “The concern is how to fix you.” He admitted that the surgery is not without major challenges, including some stubborn management and a customer base that has not gotten needed care and attention. “If you are an emergency room doctor, you should not be afraid of the blood,” Chen said.

Update : According to defense department officials, Pentagon will be rolling out 80,000 BlackBerry smartphones and 1800 Apple and Android devices on the new secure management system starting January 31st 2014. The $16 million project aims to ensure users don’t compromise military data on their phones or corrupt defense networks when on the go. “The new year will bring new mobile capabilities to as many as 100,000 DoD users,” Pentagon officials said in a statement. “DoD will begin deploying version 1.0 of the unclassified mobility capability Jan. 31 and will build out capacity to support up to 100,000 users by the end of the fiscal year.

Update : In an exclusive interview with Sean Silcoff of The Globe and Mail, BlackBerry CEO John Chen talks about the challenges that BlackBerry is facing right now and how he thinks he has a solution for these problems. “I’ll tell you, there are pain points every day,” he said. “If this could be done, it would put a statement in the world. I think it’s a pretty big deal if we could save BlackBerry.” John Chen is a big BlackBerry 10 fan. He did moved to iPhone but don’t use it anymore. “The iPhone now feels like a toy. I don’t think you’ll find the only person saying it,” he says. On to the past mistakes from BlackBerry, the change in service fee structure bewilders Chen. He likens it to someone quitting his job hoping a better one will come along, then wondering why he cant afford rent. “I would never have done that,” he says. “The disruption of the service-access fees was a mistake.

Update : Secusmart GmbH, the German company behind cryptophones which encrypts calls to stop eavesdropping is now opening its doors to regular citizens by launching new secure Blackberry smartphones for €2000. The company has sold thousands of secure smartphones to top government officials such as Germany’s Angela Merkel. Secusmart’s technology is designed to work with several recent BlackBerry models including Merkel’s Z10. Its key component is a microSD card, a chip smaller than a postage stamp that fits a slot found on many phones. That card acts as a separate hard drive for confidential information that can’t be accessed by attackers who infiltrate the operating system. According to Bloomberg report, the company has shipped more than 2,000 BlackBerrys last year with its chip to governments in northern Europe, South America and the Middle East.

Voice encryption used to be a niche that only intelligence services were interested in,” Secusmart Chief Executive Officer Hans-Christoph Quelle said. “That niche is widening now. We want to look at private customers, but we definitely have to go after companies this year.”

Update : In a recent interview with the New York Times, John Chen discussed his plans for the future of the BlackBerry. “My view of BlackBerry is broad,” Chen said in an interview following a speech at the Oasis conference. He added, “I’ll let the software determine what kind of device we make. This could mean embedding BlackBerry communications in other products, or making new ones, and forming partnerships. His turnaround strategy includes focus on core industrial businesses, make money from selling server software more than devices and re-emerge as a new kind of consumer brand when the term phone is no more relevant. In addition to that he added, “I watched Steve Jobs on YouTube, when he came back to Apple. He got up and said, ‘I don’t have a new product, I’m insanely focused on my customer base.’ That’s me now.”

Update : BlackBerry has officially announced that the Australian National Audit Office (ANAO) and Questas have selected BlackBerry Enterprise Service 10 (BES10) as their enterprise mobility solution. BlackBerry has seen 65% of its Australia’s customer base migrate to or are trialing BES10 since its launch, including verticals such as government, finance, mining and professional services.

Update : BlackBerry has officially announced that BlackBerry 10 has become the first mobility solution to receive Full Operational Capability to run on Department of Defense networks from the U.S DISA. It enables government users with a BlackBerry 10 smartphone connected with BES 10 to securely access email, data, apps and other DoD network resources.

Update : BlackBerry has officially announced its fourth quarter earnings for fiscal year 2014.

Q4 FY2014 Earnings Highlights:

Cash and investments balance of $2.7B at the end of the fiscal fourth quarter.
Adjusted Q4 gross margin of 43%, up from 34% in the prior quarter.
Channel inventory down 30% from the prior quarter.
Reduced adjusted operating expenses by approximately 51% from Q1FY14.
Revenue for the fourth quarter of approximately $976 million.
Sold 3.4 million devices, of which 2.3 million were running the legacy BlackBerry 7 OS.

Update : According to recent ComScore report, BlackBerry’s market share in Canadian smartphone industry has dropped from 20% (in 2012) to 15% in December 2013. Android OS and Apple iOS has increased its market share to 44% and 37% respectively.


From a tablet perspective, the iPad is king with 55%, followed by Android at 37% and a surprising BlackBerry PlayBook OS with 10% market share.


Update : BlackBerry CEO Chen – Security Is Key to Comeback

(source: Techonomy)

Update : According to Reuters report, BlackBerry CEO John Chen would consider exiting its handset business if it remains unprofitable, as the company looks to expand its corporate reach with investments, acquisitions and partnerships.

“If I cannot make money on handsets, I will not be in the handset business,” John Chen said in an interview.

The chief executive also said that small acquisitions to strengthen BlackBerry’s network security offerings were also possible.

Update : In response to above article BlackBerry CEO John Chen has confirmed that BlackBerry is not leaving the handset market and devices business is an important part of BlackBerry’s turnaround strategy. 

I want to assure you that I have no intention of selling off or abandoning this business any time soon.‎ I know you still love your BlackBerry devices. I love them too and I know they created the foundation of this company. Our focus today is on finding a way to make this business profitable.

BlackBerry is not a handset-only company. We offer an end-to-end solution and devices are an important part of that equation. That’s why we’re complementing our Devices business with other revenue streams from enterprise services and software, to messaging. We’re also investing in emerging solutions such as Machine to Machine technologies that will help to power the backbone of the Internet of Things.

Update : According to Reuters report, BlackBerry is planning to release security updates for BBM for Android and iOS devices by Friday to address vulnerabilities in programs related to the “Heartbleed” security threat.

Scott Totzke, BlackBerry senior vice president, told Reuters on Sunday that while the bulk of BlackBerry products do not use the vulnerable software, the company does need to update two widely used products: Secure Work Space corporate email and BBM messaging program for Android and iOS.

Update: According to Marketocracy Master Mike Koza, BlackBerry has the potential to double over the next 18-24 months. Mike Koza believes that the company has the potential to prove skeptics and critics wrong, provided they meet a few major milestones in the near future.

I think that if John Chen, the new CEO, executes successfully on his plan, we could see the stock double by this time next year, give or take a quarter. Last quarter, they didn’t really lose any money—they had a valuation adjustment—and came close to breakeven. As they stop losing cash and the dust settles from their patent litigation and contract negotiations, I think we’ll start to see the company turn around quickly. I don’t normally buy growth stocks, but I think this one might have the potential to become a growth stock.

Update : In an interview with WSJ, BlackBerry CEO John Chen was quoted as saying that he does not want BlackBerry to be a niche company.

No, why would I do a niche thing? I got a lot of CEO offers before. I’d like to become a strong software and infrastructure provider of everything that connects to each other.

Why would people buy from BlackBerry? Partly because of the know-how, patents and security. Today I’m building toward those goals. It will take a while but I have to first return the company to profitability.

Additionally, he confirmed that BlackBerry 10 is capable of running 98% of all Android apps.

Android’s strength isn’t really the quality of the phone, which BlackBerry has. BlackBerry phones are well put together. We have a great BlackBerry Messenger experience, a great operating system. And it’s the most secure phone. Secure not only in data, but in personal identity. Younger consumers love all kinds of apps, and BlackBerry runs 98% of all the Android apps. All BlackBerry die-hards know they can run Android apps.


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