BlackBerry’s Chen Focuses on Profits, Fewer New Devices

At the close of BlackBerry’s FQ2 in September, chief executive John Chen began talking more confidently that the mobile device maker, on life support only a year earlier, had completed its restructuring and could turn its attention to revenue growth.

While the company incurred yet another loss in Q2, this time for $207 million, or 39 cents a share, it was less than expected even though overall sales were down at $916 million. And, for the first time in five quarters, BlackBerry made money on its smartphone business.

Perhaps buoyed by better numbers, now Chen’s talking more forcefully about making, not losing, money, telling Reuters in an interview that BlackBerry will concentrate in fiscal 2016 on a small set of smartphones most likely to gain customer interest and do everything it can to turn profitable.

Chen, who’s repeatedly said his goal in effecting a BlackBerry turnaround is cash flow profitability by the end of the company’s fiscal 2015 in February, now is branding as successful the mobile device maker’s blueprint for cost cutting, management reshuffling, product realignment, enterprise market focus and asset sales.

That means it’s time to make money, he said. Chen is just a year into the job but he’s had enough with losing quarters and believes BlackBerry’s worst times are in its rear-view mirror.

“Once we turn this company to profitability again, I will do everything I can to never lose money ever again,” Chen said. “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,” said Chen, who’s regarded as a turnaround specialist. “I like that philosophy.”

“We will survive as a company and now I am rather confident,” he added. “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.”

While not ready yet to declare the company fully fixed, Chen told Reuters that he’s “reasonably comfortable” BlackBerry can continue to make money on its handsets, particularly its new Passport smartphone, whose intentionally constrained availability has some customers waiting to get one.

“I’m happy that this product is a successful product, but we did not make that many of them, so it is in limited supply almost everywhere,” he said.

BlackBerry’s hardware lineup for next year includes one “radically new device” and updates to its Passport, Classic and its Z3 touchscreen phone, Chen said.

“I’m not going to build a general purpose device, simply because it is a 5-inch touchscreen,” he said. “The Chinese can build one for 75 bucks, I can’t get enough parts together for 75 bucks.”