BlackBerry Ltd CEO Now Sees 80% Survival Chance

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BlackBerry Ltd CEO Now Sees 80% Survival Chance
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s CEO John Chen is optimistic on the company’s turnaround and has raised the firm’s survival chances to 80%. John Chen was made the company’s CEO in November 2013, and previously he was seeing the chances of success and failure at 50-50.

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“We have a lot of problems, but it’s not dead,” Chen said yesterday at Re/code’s Code Conference in Rancho Palos Verdes, California. “I am quite positive that we will be able to save the patient.”

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Changing priorities under Chen

Under the new CEO, the focus of the Canadian company has shifted to mobile data and security services. Connecting everything from heart monitors to automobiles to the Internet is BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s goal, so that it can become a player in the Internet of Things.

In a time span of six to eight quarters, Chen expects the revenues generated through higher-margin software will replace the hardware sales of the company that are declining, according to an interview in April.

Chen has tried to broaden the options for the company in the field of software and in his first few months, even allowed rival mobile management systems access to its phone software. The Waterloo, Ontario-based company also partnered with the developers of health-care technology with the purpose of connecting doctors and medical devices. To produce its remaining phone models, the firm has hired manufacturers to work on a contract basis.

Earlier this month, the company launched a Jakarta special edition of BlackBerry Z3, a low-priced phone targeted at the middle-class in Indonesia, which is a stronghold of the company. Later this year, the company also plans to introduce a new model that resembles its original ‘Bold’ model featuring both a touch screen and a keyboard. This model will be known as the ‘Classic’. A new BlackBerry Enterprise Server 12 will be available in November.

BlackBerry market share declining

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s market share in smart phones is dropping rapidly, and according to projections by the IDC, by 2014 the firm’s share will drop to 0.8% and by 2018 it could further decline to 0.3%.

The research firm IDC has forecast that BlackBerry’s global smart phone shipments will decline by 50% to 9.7 million this year. While the global market share of the company’s operating system in 2010 was 19%, as of 2013 it was down to 1.9%.

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Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at amanjain@valuewalk.com
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