Chen Decides To Get ‘Realistic’ About BlackBerry Ltd Smartphones

Chen Decides To Get ‘Realistic’ About BlackBerry Ltd Smartphones
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) CEO John Chen seems to have changed his tune in the last couple of days in a series of interviews that cut against his previous comments. First he cast doubt on his own turnaround efforts, saying that BlackBerry only has about a 50-50 chance of surviving, now he has admitted that the company might have to walk away from the smartphones that made it famous.

Chen will focus more on enterprise clients

“Apple has to sell 58 million phones to get, I’d guess, a 10 to 12 percent margin,” said Chen in an interview with Quentin Hardy for The New York Times. “If you’re not first or second in phone sales, where do you get any margin? You could sell 30 million phones and lose money. I have to be realistic here.”

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Before Chen was brought in to lead the recovery efforts, and everyone besides Prem Watsa expected BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) to be sold for parts – it was the intellectual property portfolio and enterprise business that seemed the most attractive. The handset division was thought to be a liability as much as anything, so it was a surprise when Chen said that he hadn’t given up on it, though it was de-emphasized during restructuring.

“I’ve got 80,000 BlackBerry enterprise servers, in a ‘Who’s Who’ of government, legal, Wall Street, hospitals,” said Chen, in a statement that shareholders must be applauding. “I need to work better with those channels.”

Chen compares himself to Jobs

Chen also made a comparison that might surprise some people, but which might actually be quite apt.

“I watched Steve Jobs on YouTube, when he came back to Apple,” said Chen. “He got up and said, ‘I don’t have a new product, I’m insanely focused on my customer base.’ That’s me now.”

It’s hard to remember, but when former Apple Inc. (NASDAQ:AAPL) CEO Steve Jobs returned to the company that he had founded, not everyone saw him as the visionary he’s remembered as today. Apple had a devoted group of users who wouldn’t touch anyone else, but it controlled a tiny slice of the PC market.

But while Jobs’ attention to his core customers may have kept the company from going under, it didn’t become Apple Inc. (NASDAQ:AAPL) as we know it today until it released the iPod, ushering in the era of portable computing. Chen may keep BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) afloat by meeting the needs of his corporate clients, but he is going to need an equally impressive new idea if he is going to return it to its former glory.

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