BlackBerry CEO Asks for Patience With Company Strategy

Speaking to investors, BlackBerry CEO Thorsten Heins says the smartphone vendor is still in the early stages of its turnaround plan.

BlackBerry CEO Thorsten Heins, just weeks after having to explain disappointing quarterly financial numbers, had to go before investors to discuss how his long-term plans for the embattled company will eventually return it to where it can compete against the likes of Apple and Samsung.

During the company's shareholders meeting July 9, Heins preached patience and the need for a long-term view when discussing BlackBerry, which he said is still in the early stages of a difficult turnaround and that its BlackBerry 10 operating system—and accompanying devices—is still relatively new to the market.

"While we have made all this great progress and while we are proud of what we achieved in the first phase of our transition, we are still in the midst of a major complex transition of this company," he said. "And like most of these major transformations of companies, progress can be volatile and it can be volatile in the short-term basis."

On the same day that Heins spoke with shareholders, reports indicated that BlackBerry is preparing for another round of job cuts, beyond the 5,000 layoffs done in 2012. According to a report in the Wall Street Journal, BlackBerry executives are getting ready to cut even more employees—mostly middle managers—from the company's 11,000-person workforce. Among those already fired was Richard Piasentin, BlackBerry's vice president for sales in the United States, who was let go in June.

During his talk with shareholders, Heins indicated that competition in the United States is particularly tough.

"While we are satisfied with the reception of BlackBerry 10 in various regions, we fully understand as the management team that we still have a way to go in the U.S. market as the most ferocious and the most competitive market in our industry," he said.

BlackBerry—formerly known as Research In Motion—at one time was the world's top mobile phone maker. However, starting with the introduction of Apple's iPhone in 2007, the company has been battered by such smartphone makers as Apple and Samsung, and has seen customers flee to rivals and its fortunes fall. During the company's fiscal 2013, it lost 3 million subscribers, bringing its subscriber base to 76 million.

Heins is leading the company in a three-step transformation effort to reverse BlackBerry's downward spiral and make it competitive again. The first phase—which involved restructuring the company and workforce and launching the much-delayed BlackBerry 10 OS—is complete. The next step is to drive sales of products based on BlackBerry 10 to make them more competitive with devices from Apple and those running Google's Android mobile OS.

In addition, BlackBerry executives want to move the company's focus beyond just mobile communications and into the mobile computing arena, where its technology can be leveraged in such areas as automotive technology, health care and machine-to-machine communications.

The company in January launched the first BlackBerry 10-based device, the Z10 smartphone, and later released the Q10. However, despite initial excitement around the touch-screen Z10, sales have been lower than had been expected. In June, BlackBerry officials announced that in the second calendar quarter, they had shipped only 2.7 million BlackBerry 10 devices, and they represented only 40 percent of all the smartphones the company shipped during those three months.

BlackBerry lost $84 million in the quarter.