BlackBerry CEO would consider handset unit sale, eyes investments

NEW YORK Wed Apr 9, 2014 7:45pm EDT

Blackberry CEO John Chen poses for a portrait in Toronto March 26, 2014. REUTERS/Mark Blinch

Blackberry CEO John Chen poses for a portrait in Toronto March 26, 2014.

Credit: Reuters/Mark Blinch

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NEW YORK (Reuters) - BlackBerry Ltd would consider exiting its handset business if it remains unprofitable, its chief executive said on Wednesday, as the company looks to expand its corporate reach with investments, acquisitions and partnerships.

"If I cannot make money on handsets, I will not be in the handset business," John Chen said in an interview, adding that the time frame for such a decision was short. He would not be more specific.

Chen, who took the helm of the struggling smartphone company in November, said BlackBerry was also looking to invest in or team up with other companies in regulated industries such as healthcare, and financial and legal services, all of which require highly secure communications.

The chief executive said small acquisitions to strengthen BlackBerry's network security offerings were also possible.

(Reporting by Alastair Sharp, Nicola Leske, Nadia Damouni; Editing by Frank McGurty and Steve Orlofsky)

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Comments (2)
Stephen_81 wrote:
I would like Clarification please.

No Where in the video interview did John Chen say “If I cannot make money on handsets, I will not be in the handset business,”

He did say

JC “I told investors we need to make money in the handset business and this is what I am fixated in doing. I’m hoping that between now and sometime next year. — we will make money in the handset business”

Interviewer “And what happens if you don’t?”

JC “well if we really couldn’t find a way to make handsets profitable there will be ways to make handsets profitable then maybe we will just have somebody else build more and more handsets and I build less and less handsets, or maybe people will design more handsets for me – there’s got to be a way to make handsets
because our operating system software technologies so strong, If I just license software technology I will be I would do well. So we will be in the handset business but it’s a matter of what level of integration.”

I would just like clarification if you are directly quoting or paraphrasing in this story.

Apr 10, 2014 8:03am EDT  --  Report as abuse
khehl wrote:
he handset business is still really important.This part was unmistakably clear. Chen was asked directly if the handsets were the least of his priorities. He said he put equal weight on handsets and the other parts of the business because he needs to offer an end to end solution. He was crystal clear about his expectations that he will get the handset business to profitability. Even when asked what he’d do if he could not make it profitable he simply said he might need to get others to build more handsets for him. I take this to mean more business heading to Foxconn and less internally designed stuff. The bottom line is that Chen in no way suggested he wants to stop selling phones.
They’ve been successful convincing customers to wait on the latest BES technology Chen said that when customers hear their plans they think the plan makes sense. He further said that they’ve been successful in getting customers to take a “wait and see attitude” on the launch of new BlackBerry server products in November of this year. Unless Chen’s ability to calibrate the truthfulness of his customers is way off, I think we’re now looking at a a case of execution risk more than anything else. If customers haven’t left BlackBerry by now, they may as well see what the company brings to market this year. No point in making a hasty decision before then.
He thinks the company is “rightfully” undervalued.With respect to the stock, Chen said, “I think the company is very undervalued … rightfully so. There have been a lot of issues in the past 2 or 3 years.I think our roadmap makes sense. Our assets are there. What I’m trying to do is make sure we deploy the best of our assets to what the market needs”. He follows up by saying, “I’m hoping that the shareholder thinks that this is a good share to bet on because the downside is very limited, but there is going to be very good upside.”

Apr 10, 2014 1:53pm EDT  --  Report as abuse
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