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Signs That Chen’s Strategy For BlackBerry Ltd Is Working

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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has a lot riding on the success of BlackBerry Enterprise Server 12 (BES12), which launched last month. Since it can manage cross-platform devices (eg Android, iPhones) companies don’t have to choose between bring-your-own-device policies or using BlackBerry’s best in class enterprise services. Despite some the negative tone of the article, a couple of tidbits reported in today’s FT make it look like BlackBerry’s turnaround strategy is working.

“The transformation of BlackBerry is well under way,” says BlackBerry president of global enterprise services John Sims, reports Harriet Agnew and Daniel Thomas for the FT. “We are on track to be cash flow break even by the end of the fiscal year. The positive support we’re seeing from our enterprise customers is helping us on this path.”

BlackBerry winning back corporate clients

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has been offering free 60-day trial upgrades (the FT article implies that some banks are just getting free upgrades), and the policy is paying off. According to Sims there have been more than 5 million BES access licenses registered under the EZ Pass program since last March, and 30% of those were companies moving away from competitors’ platforms. BlackBerry’s corporate market share is growing again, which is exactly what it needed to happen to stabilize its business.

One of the biggest concerns about BlackBerry’s future has been whether large enterprises deciding which company to rely on wouldn’t want to risk moving to BES12 as long as the company’s future was uncertain. This means that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is successfully convincing companies that it will be around for the long haul, which can quickly turn into a self-fulfilling prophecy.

BlackBerry successfully repositioning itself

It will still take a lot of work for BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) handsets to start regaining market share, but that’s not really a problem. It’s been clear for some time that in order for BlackBerry to recover it has to do so by re-positioning itself as a software company that also makes phones instead of the other way around. BlackBerry CEO John Chen has played down ambitions for the device business without dismissing the possibility that he will try to build it back up in the future. As long as he’s growing the enterprise side of the business, he’ll eventually get the chance to take a crack at it.

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