BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) CEO and executive chair John Chen has written an op-ed on CNBC outlining the way forward for his embattled company and attempting to give investors reasons to be optimistic heading into the new year. With his focus on BlackBerry’s strengths in security and enterprise, he’s saying what many people have been waiting to hear.
Chen: BlackBerry still leader in enterprise
“When it comes to enterprise, we’re still the leader,” writes Chen. “With a global enterprise customer base exceeding 80,000, we have three times the number of customers compared to Good, AirWatch and MobileIron combined.”
The US Department of Defense still only allows BlackBerry to be used on its networks and Chen also says that all seven of the G7 governments are BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) customers, but anyone thinking about secure communications in the long-term has to look for alternatives in case BlackBerry goes under, and companies like Good and AirWatch have been working to present themselves as possible successors. Keeping them at bay has to be a high priority if Chen is going to turn BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) around.
BlackBerry devices division to focus on emerging markets
Just as importantly, Chen has deemphasized the Devices division. He previously surprised investors when he committed to continue manufacturing smartphones even though they have been a big loser for BlackBerry in recent years.
“We have streamlined our Devices business model and partnered with Foxconn Technology Co., Ltd. (TPE:2354) to manufacture smartphones in Indonesia and other fast growing markets. We’re also focusing our design and hardware team on developing high-quality products at competitive prices,” writes Chen.
This focus on emerging markets (where BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has a stronger consumer brand) and lower prices sounds like a quiet acknowledgment that the company can no longer compete with Apple Inc. (NASDAQ:AAPL) and Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930), so it will go after the lower end of the market instead. Designing phones with “faster product lifecycles,” also sounds like a step away from quality toward budget smartphones.
The growth of BlackBerry Messenger (BBM) as an app for iOS and Android users has already been commented on, but the question has always been how it will actually make a profit. Chen says there are “plans to turn it into a revenue stream in the coming years,” but doesn’t elaborate. Similarly, he says we can expect new applications from BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s QNX technology, but doesn’t get into details. His op-ed hits a lot of the right notes, but the company still has a lot to prove.
