BlackBerry is Coming Back

By Lori Castle, Editor in Chief — June 19, 2014

For anyone who thought BlackBerry bought the farm long ago, Executive Chairman and CEO, John Chen may still prove them wrong. However slight, and though largely due to cost cutting, the company reported a $23 million, or 4 cents a share, profit for its last quarter—Q1 of 2015.
 
Chen, who is personable and open on the calls, seems to have a more simpatico relationship with The Street than prior leadership, despite the company’s shortcomings. He doesn’t shy away from telling it like it is, or saying “I don’t know.” Perhaps, the confidence is catching.
 
Still, the bottom line is the bottom line, and Chen acknowledges that. Today’s accomplishment proves “stabilization” he said. Revenue was down 1% from the prior quarter, hardware revenue was essentially flat as well, and 2.6 million BlackBerry smartphones were sold through.
 
“Our performance in fiscal Q1 demonstrates that we are firmly on track to achieve important milestones, including our financial objectives and delivering a strong product portfolio,” said Chen, in a release. “Over the past six months, we have focused on improving efficiency in all aspects of our operations to drive cost reductions and margin improvement. Looking forward, we are focusing on our growth plan...”
 
Product Roadmap
BlackBerry has been very busy growing this year already—OS updates, BBM rollout, new features, new device, new projects, new partnerships—and Chen says to expect that to continue on a monthly basis for the rest of 2014 (save for August when most of the world is on holiday). Upcoming is: BBM for Windows in July; BBM meetings in September; BES 12 in November; and QNX cloud in December.
 
On the device side, the Z3 for Indonesia was already launched and Chen mentioned the upcoming BlackBerry Classic during the BlackBerry Experience roadshows recently as well. During an earlier quarter call, he complained about the rumor mill leaking images or speculating on new devices. This time he encouraged listeners to search for the most recent disclosures. Post-call, he previewed the BlackBerry Passport to reporters from devotee site CrackBerry. Yes, it has a keyboard.
 
All this and more, to lead to $100 million FY16 revenue target.
 
Enterprise Effort
Chen reviewed the latest subscription base (50 million) and praised the success of the EZ Pass program, which enables a no cost upgrade from BES 5 and trade ins from competing MDM providers. “On the BES front, we have a very strong uptick of the EZ Pass program. Over 2,600 customers have registered with us. We have issued 1.2 million plus, meaning, more than 1.2 million licenses and over 10% of those licenses were traded in from competitive MDM platforms, most notably, from good technology and mobile volume,” he said.
 
Sounds good, but are the core customers left, sticking around? Are any coming back? Through the BlackBerry Experience shows held in the U.S. and Europe, Chen said he has spoken to a lot of “big name” customers.
 
In laying out the vision, the majority of the time, he said, customers stay. In other cases, it was a “little too late.” But because of the breadth of the product, he says they have and will continue to win some back. This is greatly compelled by the options laid out by the EZ Pass program. Plus, Chen said, “I think quarters like these allow the market to return some confidence in us.”
 
App Gap
To address consumer needs, mainly with apps, BlackBerry is partnering with Amazon for access to their app store. With a dependence on the Android ecosystem to fill the app gap, are the BlackBerry developers left behind?
 
“For the enterprise app developer, especially with our Internet of Things vision, they are very keen and working with us, mostly because of the security nature of all our components. For the more consumer-oriented, I have gotten nothing but positive responses to our Amazon Appstore connectivity,” he said.
 
He is also encouraging BB10 developers to work with the Amazon developer ecosystem, for the tools and the reach it has. Everybody wins, according to Chen. The developers get a new market and Amazon gets more users. For his part, “I love it, because I don’t have to spend the money on the consumer side and can focus on the enterprise side. Then the enterprise loves it, because there will be more focus on it.”
 
More partners are in the works. There is nothing definite, according to Chen, but for the IoT, he will be seeking a “really big ecosystem” to join with BlackBerry’s. He looks forward to more quarters of success on the road to a cash flow positive company by the end of FY15 and profit in FY16.

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