BlackBerry Completes First Stage of Two-Year Turnaround Plan

by Istvan Fekete on November 10, 2014

The first stage of the two-year turnaround plan is completed, says BlackBerry CEO John Chen. The company is on the right track and it is now focused on profitability. One of the key decisions Chen made was not to launch too many new devices.

Chen took over the struggling Canadian smartphone manufacturer at a time when everyone in the tech industry was whispering about the company’s death: it was scrambling to find a suitor and was in the middle of painful restructuring.

Over the past 12 months, BlackBerry has sold assets, struck partnerships, lowered manufacturing costs, widened its app offerings, and raised cash by selling real estate in Waterloo, Ontario.

This, however, doesn’t mean that the worst is over for BlackBerrry. If you look at what Wall Street analysts are recommending, only one has a “buy” rating, while 25 of 37 covering BlackBerry have a “‘hold” rating for the company’s stock.

“Once we turn this company to profitability again, I will do everything I can to never lose money ever again,” Chen told Reuters in an interview this week. “That is definitely something I am very focused on doing.”

“If you look at my track record at Sybase, I think we made money for some 60 quarters in a row, even when the dotcom bubble blew up we were profitable. I like that philosophy,” said Chen, who added he believes the worst is now behind BlackBerry.

“We will survive as a company and now I am rather confident,” he said. “We’re managing the supply chain, we are managing inventories, we are managing cash, and we have expenses now at a number that is very manageable. BlackBerry has survived; now we have to start looking at growth.”

Over the past 12 months, Chen has been instrumental in strengthening BlackBerry’s position on markets it is able to dominate: for example, the company is launching its latest mobile device management platform, BES 12, allowing companies and government agencies to manage and secure devices running the major operating systems, including BlackBerry.

While smartphone manufacturing will remain part of the BlackBerry portfolio, Chen was smart enough to reconsider the company’s position in the market. BlackBerry is “reasonably comfortable”, and can keep making money from its handset business due to operating margins and limited supply of the devices it has.

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Written by: Istvan Fekete. Follow by: RSS, Twitter, Facebook, or YouTube.

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