Why BlackBerry CEO Chen Doesn't Worry About Smartphone Market Share

By Todd R. Weiss  |  Posted 2016-07-19 Print this article Print
BlackBerry, John Chen

Not so, Chen said at the security summit. "You media [members] have played it up. The Classic [reaching the] end of its life is a simple thing" as smartphone models get outdated and are replaced, he said. "Apple doesn't make the iPhone 4 anymore, but no one writes that Apple is getting out of the iPhone business. When we remove products, people start rumoring that the handset is dead or the keyboard is dead."

If BlackBerry ever does decide to exit handset production of its own, the company could choose to license its designs and products and let another company build and support them, Chen added. "Obviously, that is a different level" of business, he said, but "as long as I can stay in the hardware business and provide a soft landing for customers, I should do that. That's the type of war I face every day."

BlackBerry's fall from dominating the enterprise smartphone market has been swift and stunning. In early 2006, before the first iPhones appeared from Apple, half of all smartphones sold were BlackBerry models. By 2009, though, its share of the global smartphone market was down to 20 percent. The company continues to face growing competition from Apple, Samsung, Google and others.

The company has been having a tough time financially for some while. In late June, BlackBerry reported a net loss of $670 million for the first quarter of fiscal 2017, compared with a net loss of $238 million in the fourth quarter. The company's GAAP revenue was $400 million, while its non-GAAP revenue was $424 million for the first quarter. 

In April, BlackBerry announced that it would launch two new lower-priced Android smartphone models later in 2016 in an effort to win back customers and increase sales after its flagship, high-end Android Priv phone failed to catch on with buyers as much as the company had hoped. The Priv, which BlackBerry targeted at enterprise customers, might have been priced too high at about $700 when it debuted in September 2015. Earlier in April, BlackBerry dropped the price of the Priv to $649 as it tried to increase sales of the device, which features both a touch-screen and a slide-out physical QWERTY keyboard.


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