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Mar 6, 2014

BlackBerry: To Be or Not to Be, That Is the Question




BlackBerry is trying for the second time to become a major player on the mobile phone market, but for the first time this is also a matter of survival for the Canadian company.

Since Thorsten Heins took leadership of BlackBerry back in January 2012, the company continued to bleed money to the point that even Windows Phone, a brand new mobile platform, managed to surpass it in well-established markets. The legendary BlackBerry security and reliability traits took a huge blow with the major outage from October 2011, which was also one of the reasons Heins was appointed new CEO and President of BlackBerry while the company’s founders Jim Balsillie and Mike Lazaridis stepped down. Unfortunately, the strategy for turning BlackBerry’s financial status around failed during Heins’ reign, which led to another dismissal from the company’s leadership position. The newly appointed CEO John Chen hopes to regain some of the market share lost by BlackBerry in the last couple of years, but unlike his predecessor he seems more realistic about the chances for success.

In a recent interview for Financial Times, he bluntly stated there’s a 50:50 change that he would be able to save the company. Mr. Chen seems rather pragmatic in his statements and has already set certain goals his company needs to achieve in order to survive. One such goal is to turn BlackBerry’s cash flow on the positive side by the end of this fiscal year, which is no small feat for a company that did not know profit for a very long time. This would be the first step for BlackBerry in regaining some of its former glory, but Chen aims a little higher and hopes the Canadian handset maker might one day become a “dominant player” in the smartphone market. BlackBerry’s chances for survival are not intertwined with Chen’s abilities to turnaround the company’s negative status. He proved his skills while leading Sybase, a database software business, which had a similar financial history and managed to survive thanks to Chen.

Will he be able to do it again with BlackBerry? Well, as Chen has put it, there’s a 50:50 chance for him to succeed since, as compared with the Sybase turnaround, BlackBerry’s one is “a bit more challenging.” The first thing Chen did was identify ways to conquer the low-end smartphone market in some countries previously considered BlackBerry’s fiefs. The result is the newly announced BlackBerry Z3, which will be manufactured by Foxconn and will cost under $200 (€145). The smartphone will be launched in April in Indonesia through all major carriers, and if it proves successful, Chen plans to bring it to other emerging markets as well. Another step towards the survival of the company would be to regain the huge number of BlackBerry fans who switched to other platforms when the Canadian company came on the market with the BlackBerry Z10.

Many consider launching the BlackBerry Z10 before the Q10 was a major marketing mistake given the fact that the vast majority of fans preferred the traditional QWERTY-like design instead of the full-touch layout of the former. John Chen seems to have acknowledged that, and the result is the upcoming BlackBerry Q20, which will be the company’s new flagship smartphone. The handset will not only reiterate BlackBerry’s attachment to the traditional QWERTY keyboard, but it will also bring the trackpad back, along with the physical Menu, Back, Send and End buttons. The good news is things will not stop here, as Chen mysteriously stated BlackBerry would launch more high-end smartphones by the end of the year, though he did not offer any additional details. In the services area, BlackBerry made consistent improvements with the launch of its popular BBM instant messenger on Android and iOS platforms. The Canadian company has a strong partnership with Nokia and has already confirmed it will launch BBM on Windows Phone operating system.

BlackBerry may have also found ways to monetize on BBM’s use without disrupting the service’s standard features. In this regard, the company announced that it would never introduce ads into BBM chats. Instead, BlackBerry opted for sponsored posts in the Updates area of the application and a few ad-related invitations that a BBM user will receive monthly from various BBM Channel owners. This will be strictly controlled by BlackBerry, and in the end it might prove to bring some money to the ever-lossmaking Canadian company. There’s also the problem of BlackBerry’s enterprise business, which is now being reinforced by Chen with his new management. BlackBerry lost almost all its major enterprise customers in the last couple of years, but Chen is positive and says that, even though winning them back or bringing new ones in may prove difficult, at least they tend to stay with you for a much longer time.

Enterprise customers are usually more loyal than end users, but only as long as they are provided good products and services. Here is hoping BlackBerry will soon become a major player in the smartphone market once again.

BlackBerry logo
Image credits to BlackBerry

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