Rooting for BlackBerry

By Lori Castle, Editor in Chief — April 14, 2014

To sell or not to sell—a statement from BlackBerry CEO John Chen was taken out of context and circulated enough that the executive clarified on his blog: “I want to assure you that I have no intention of selling off or abandoning this [handset] business any time soon.‎"

In an impromptu appearance in the press room, during last week’s BlackBerry Experience event in New York City, Chen elaborated and told reporters, “We are working really hard to try and find a way to make money in the handset business. We are committed to the handset business and we are going to make it work; we have a lot of good plans behind it.”

And, despite the erroneous headlines, Chen had more things to say that day, as did the other John charged with moving the company forward—John Sims, President, Global Enterprise Services at BlackBerry.

Device Dollars
Is the target of making money on the handset business reliant upon growth (in terms of the adjustable market) or can BlackBerry make money based off of the existing base of users? It’s not that simple. Chen said that there are multiple components in the answer to this question—the cost of manufacturing, the efficiency of the channel, warranties, repairs, support, scraps, marketing spend and more.

“Every piece is being worked on here. We have people looking at every single component of what makes a dollar,” he said. Nonetheless, when it comes to the enterprise, where price is not as sensitive, BlackBerry is going to build high-end phones and continue to “push the boundaries” for regulated industries, according to Chen.

Business and Business
As laid out last December, BlackBerry reorganized into four business units to focus on devices, QNX, the enterprise and messaging (BBM), so devices are just one piece of the BlackBerry pie.  In looking at the profitability of the various units, and with the move to supporting all devices, the “probability” is that services are no longer dependent on the success of the handset business.

“In that regard, they are independent. Each of the business units must be successful in their own right,” said Sims, adding, “We intend to be successful in all four spaces.” He went on to explain that each unit is in different stages of maturity, with the service business being the most grown up. QNX is also established and it’s a “gem” the company intends to blossom over the next few years. 

BBM is big in the consumer space, but (as Chen also noted in his first earnings call) Sims said that product has not been monetized yet. Part of the monetization strategy will be to bring it to the enterprise space, and it’s part of the reason why Sims is in charge of both. 

Enterprise Roots
That, of course, leaves the enterprise unit, of which in a presentation earlier that day, Sims said, “We are returning to our roots and reestablishing our leadership in end-to-end enterprise mobility.” That return will come through “focus”—a key element of the new strategy that includes focus on the business and, more specifically, focus on regulated industries.

BlackBerry is also focusing on enabling greater productivity, collaboration and communications—all securely and across platforms. Sims pointed out, “Not just on BlackBerry devices, where the intent would still be the gold standard, but also across iOS and Android platforms as well. Those are key elements in our strategy.” A move toward increased third-party partnerships is “key” as well.

Shout Out Across OSes
Sims could not emphasize this point enough; in BB10 and forward is the support of all enterprise devices. That is quite a distinction from the past.  “When BES10 was first introduced, it was mumbled that we support Android and iOS. We don’t mumble anymore—we say that very strongly. We support iOS, Android and BlackBerry, and we support all the security paradigms,” said Sims.

Also, in expanding and evolving the platform to go beyond mobile device management (MDM), the company is also moving into enterprise mobility management (EMM), adding additional functionality with plans to expand into app development and management, according to Sims.  

Going Forward and Back
It’s easy to communicate a new strategy, but another to execute, and failed execution was historically the downfall of the company—a fact it readily acknowledges. The mea culpa has even become an inroad to some companies that left.

For those with most extreme security, required by some of the governments and government departments, all the way through to the “wild west” of BYOD—BlackBerry still wants everyone to know that “it’s the only company in the industry that can cover the full spectrum.” 

But outside of the regulated industries, where there is a more compelling case for BlackBerry, what does Sims say to enterprises that have moved on?

He explained to Mobile Enterprise, “We talk to people that are no longer BlackBerry customers and we’ve said to them—‘we understand what you did and why you did it.’ We apologize for the fact that we may have created some of those circumstances. But, also say ‘we want your business.’”

It may take two years to get the business back, he pointed out, but they are rebuilding relationships in a “high touch” way. For the companies that have gone to competitive MDM platforms, BlackBerry is counting on the new model of BES12 to make coming back easier.

Echoes of the Past
Leadership at BlackBerry today tries not to dis that of the past, but they are certainly trying to create distance. Sims noted, “We focus on looking forward, rather than looking at the past. We were not in those people’s shoes during that time, so we can’t really comment on what they did.”

What they do know, and can comment on, he said, is the things they are hearing from customers about missed deliverables back in the day, along with the warning of “don’t do it again.” Sims said, “We can control that and make sure that doesn’t happen.”

What about the Consumer?
Still, mistakes of the past are never far behind. If 2013 was the year of forgetting the enterprise, some are looking at the new strategy as one that is forgetting the consumer—the same consumer who started the BYOD revolution in the first place and changed the device landscape in business.

When asked about this, Chen told Mobile Enterprise, “We can separate the market into two pieces. The first market is the customer we already had, especially in developed countries. We need to be really focused on winning those enterprises back. There is a cache from the enterprise—if you can win it back, you will sell more to the day-to-day consumer—the prosumer.”

Other Initiatives
• BlackBerry is exploring partnerships in the payment space.
• There are no specific plans at this time for a new tablet, but Sims said, “John [Chen] likes the idea of having one.”
• The prior announced Innovation Center in Washington D.C. will open later this year.
• The Q20 has been officially renamed the “BlackBerry Classic.”

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