Resilience in motion – BlackBerry’s tough journey back to profitability

by Oluwapelumi Oyetimein

Just less than a year ago, pundits predicted the end of Blackberry and some even went as far as listing it one of the companies that may soon cease to exist and were faced with a takeover by Fairfax Holdings. Fast forward to a year later, Blackberry has changed most of their management team including the CEO. Thorsten Heins was replaced with John Chen who has had experience turning around a tech company.

How did they get here in the first place? 7 years ago, BlackBerry was at the top of their game and they got comfortable. Apple came and changed the game, in terms of form factor. But then, Nokia produced a touchscreen phone before Apple but they didn’t have a Steve Jobs to help them market it and the whole world saw it as another bulky device. Nokia is no more in the business of mobile phones, at least for now, after being bought by Microsoft.

John Chen, BlackBerry's CEO. Image Credit: Reuters.
John Chen, BlackBerry’s CEO. Image Credit: Reuters.

They recently released their 3rd quarter financial reports and even though they missed the mark, they have largely broken even. BlackBerry is no longer the sick giant that it was this time last year. According to CEO, John Chen, they have been able to stem operating costs and have now trimmed down on bloated expenses which involved a lot of staff downsizing. They also reduced the number of devices produced per launch given the bad experience they had with the BlackBerry Z10. The focus is now on enterprise as sales have continually picked up on the BES and also on distribution for the mobile devices.

Even though John Chen is shifting focus from consumers as a company, I personally think this is not exactly a good idea but hey, it’s working so who am I to complain? Blackberry’s new focus with respect to devices are what the CEO terms prosumers – professional consumers – professionals who require a mobile device for their daily business use. They are also looking in other directions like the Internet of Things and embedded systems via their acquisitions of various companies like Nanthealth which currently provides a genome browser which provides interactive reporting with oncologists via the BlackBerry Passport and Secusmart which provides encrypted voice and data encryption for devices.

Also worthy of note is the partnership with Foxconn (the same company that puts together all those iPhones) to produce low-budget and affordable devices for low-end consumers and a product of that partnership is the BlackBerry Z3 which sold out in its first day in Indonesia and then in India. More recently, they have partnered with Boeing to provide additional security for the company’s rumoured black phone and also with Ford Motor Company through their subsidiary QNX to provide the car company’s infotainment OS starting from next year. Essentially, every Ford car and SUV will run QNX OS which has previously been in use in the aerospace industry and other car companies like Mercedes Benz and Audi.

BlackBerry is now looking to improve distribution for their devices as this means more sales in hardware and more especially for the BES. More sales equals growth. With a determined team in place, it is safe to say BlackBerry is not going down any time soon.

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