BlackBerry Ltd (BBRY) May Exit Handset Business: John Chen [UPDATE]

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BlackBerry Ltd (BBRY) May Exit Handset Business: John Chen [UPDATE]
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) CEO John Chen said in an interview Wednesday that the company won’t be in the handset business if it remains unprofitable. He said it’s possible to generate money off shipments of even 10 million units a year. BlackBerry sold less than 2 million smartphones during the latest quarter. At its peak, the company sold more than 52.3 million devices in 2011. Chen added during the interview in New York that the time frame for such a decision is quite short. His statement comes as the company gears up to launch a new low-cost smartphone in Indonesia, after joining hands with Foxconn Technology Co., Ltd. (TPE:2354).

BlackBerry eyes investments, acquisitions and partnerships

Chen took over as CEO of the ailing company in November last year after BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) failed to find a suitable buyer. The Waterloo-based company has laid off more than 9,500 employees over the past three years to cut costs as sales continued to dwindle. BlackBerry reported a net loss of $423 million as its revenues shrank 64%. Chen said his short-term goal is to cut costs and keep the company afloat. He emphasized that the company is on track to become cash flow positive in the current fiscal year, which ends February 2015.

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Chen’s long-term plan for BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) includes competing in the connected home market, where smartphones, kitchen appliances, and automotive consoles are connected. He said the company will strengthen its corporate reach through investments, partnerships and acquisitions. Chen is looking to join hands with other companies or invest in regulated industries such as financial, healthcare and legal services. They all need highly secure communications. He may also make small acquisitions to boost BlackBerry’s network security offerings.

BlackBerry won’t go up against WhatsApp

Security has become a critical issue for government and business organizations after the revelations of NSA spying by Edward Snowden. Chen is seen as a turnaround expert in the business community. He wants BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) to focus on its core base of government and corporate clients, along with its services business, which provides security to smartphone on the internal networks of large clients.

Talking about BBM’s comparisons with WhatsApp, Chen said he is not going up against WhatsApp. Instead, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is focused on secure messaging.

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares inched up 1.76% to $8.10 in pre-market trading Thursday.

UPDATE 10:38 EST: BlackBerry’s CEO clarifies, we don’t plan to unload handset business.

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6 COMMENTS

  1. I think BlackBerry’s executives have caused the demise themselves through lack of innovation. FFH. (PREM WATSA) won’t lose due to he protected his investment through the debenture loan. Which will cover his full stake in BlackBerry

  2. if your calling doing it wrong being negative then yes? Chen is shrinking the company further creating the negative impact on the company. This will reduce the company’s worth, share price will probably fall well below $5 due to this move by Chen.

  3. Its all about making money, my friend. There are investors that want to make money off of blackberry’s failure. Unfortunately, the most powerful people are shorting Blackberry stock, so they are able to heavily influence the media and force the sheeple to hate blackberry all for another buck in their pockets. The scarier part is that this is constitutionally legal, although extremely morally wrong.

  4. Does it seem to anyone other than me that the media appears to be trying to put a negative spin on everything Blackberry says or does? What is up with that???

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