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    BlackBerry Q4: Chen Says Turnaround Is Ahead of Schedule

    Written by

    Michelle Maisto
    Published March 28, 2014
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      BlackBerry’s turnaround is on track, if not slightly ahead of schedule, CEO John Chen—roughly 26 weeks on the job—told investors March 28, announcing the results of BlackBerry’s fiscal 2014 fourth quarter.

      “I think the numbers show we are about a quarter ahead at this point,” said Chen.

      BlackBerry, which has slashed jobs, sold off real estate and offloaded its inventory woes onto partner Foxconn, posted a loss of $423 million for the quarter—a dramatic improvement over its $4.4 billion loss the quarter before.

      Its adjusted loss per share was down to $0.08, compared to $0.67 the quarter before.

      Revenue for the quarter was $976 million, down from $1.2 billion the quarter before and $2.7 billion a year ago. Operating expenses were down by 51 percent since the first quarter of its fiscal year, and channel inventory—the albatross of recent quarters—was down 30 percent from the quarter before.

      BlackBerry sold 3.4 million smartphones during the quarter, 2.3 million of which were BlackBerry 7 devices (versus units running its latest OS, BlackBerry 10).

      Chen, who has a pleasant manner, speaks off-script during the calls and seems to thoroughly enjoy the intellectual challenge he signed up for with BlackBerry, declared himself “extremely pleased” with the results.

      What he’s focused on going forward is first and foremost returning BlackBerry to “financial soundness,” he said. BlackBerry’s handset business—which no one should doubt is a priority for the company—”must be made profitable.”

      Another area of focus is growth.

      “We need to do it in a well-paced manner. In the immediate future it will come from software and services,” said Chen, with hardware to eventually follow.

      The company is getting ready to ship its next flagship smartphone and its first device since Chen’s arrival, the Q20, as it was called during its February introduction.

      Marketing wanted to call it the Q20, but Chen preferred the Classic.

      “We did a survey, of one—me. And I won. It’s the Classic,” Chen said, impishly, during the call.

      While BlackBerry has tried to cater to the trend of touchscreen-based devices, what BlackBerry’s core customers want is the BlackBerry keyboard. The Classic features a trackpad and dedicated Menu, Back, Send and End buttons—classic BlackBerry fare.

      Chen also formally announced that the company is starting a new production run of the BlackBerry Bold, which it will support “for as long as there is customer demand.”

      “I hope no one thinks we don’t take seriously our handset business,” said Chen, calling the Classic a “great product” and adding that the Jakarta, for the Indonesian market, and other strong offerings are coming. “We are very focused on making money from handsets.”

      Still, for now software and services are a focus, as BlackBerry works to pull regulated industries in close. This week it announced that BlackBerry Secure Work Space for iOS and Android, its multiplatform container solution (everything in the secure container belongs to and is controlled by IT, everything outside of it belongs to the device’s owner and is unseen by IT), received a federal certification deeming it safe for use in businesses requiring the strictest security, including government customers.

      A day later, it announced that BlackBerry 10 had become the first mobility solution to receive Full Operational Capability (FOC) approvals from the U.S. Defense Information Systems Agency and could run on U.S. Department of Defense networks.

      BlackBerry is also working to grow its most popular app, BBM, which now has 85 million active users.

      “We’re seeing a solid uptake in multiplatform users, and growing the BBM user base is a top priority,” Chen said, adding that the app will soon be available for Windows Phone users. BBM Channel is also growing and is now half a million Channels strong.

      Expect QNX, BlackBerry’s in-car software that’s the platform on which other offerings (Apple’s CarPlay included) are built, to also be an increasing focus.

      Chen made clear that he’s excited about BlackBerry’s potential. Once he gets its finances in order, he said in so many words, “There are a lot of areas we can explore.”

      Related Stories:

      >> BlackBerry’s Seriously Bad Luck Is It Really Needs the Guy It Just Sued

      >> Leaked BlackBerry 10.3 OS Shown Off by Exactly the Users It Needs

      >> BlackBerry Secure Work Space for iOS, Android Gets FIPS-Certified

      Follow Michelle Maisto on Twitter.

      Michelle Maisto
      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University.

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