BlackBerry’s John Chen Talks New Phones, Encryption and Message for Tim Cook
April 4, 2016
Shah Sheikh (1320 articles)
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BlackBerry’s John Chen Talks New Phones, Encryption and Message for Tim Cook

In an interview with CNBC, BlackBerry Ltd (NASDAQ:BBRY) CEO John Chen spoke about the company’s ailing business. The turnaround specialist stated that if the turbulent company doesn’t make profit from the hardware side then it may just become a software-only company. When the BlackBerry Priv launched an year ago, Mr. Chen stated that he needed one year to make the device profitable. He still believes that the device could reap some profits.

BlackBerry posted fourth-quarter earnings yesterday where the company made a loss, leading to the stock to dip 5%. BlackBerry’s revenue fell to $464 billion in the quarter from $660 million a year ago. On the other hand, analysts expected the former smartphone giant to generate $563.2 million. The company reported a loss of $238 million compared to $28 million a year ago.

In an interview with Bloomberg, John Chen explained why the PRIV didn’t get as much attention as the company had hoped. Due to delayed network contract agreements, the PRIV’s distribution took a hit. Moreover, while the device was aimed with precision at the high-end market, the saturating smartphone market in that category didn’t help the company. He further added that enterprise units were the major focus but the company didn’t do well in that area. He believes that the pricing of the device may have to be revisited and we could see something next week.

He added that the company is working on a mid-range phone, which means we might see new hardware in this year. This new phone will be mid-range, to compete with the bigger mass market. However, with a lower average selling price (ASP), the company will have to sell a whole lot of units to breakeven. He also praised the fact that users who bought the PRIV absolutely love it.

Moreover, he hinted a crossover where having a mid-range phone will also help sell the high-end PRIV. In terms of problems with the device, Mr. Chen said that upgrading the operating system on a regular basis for security updates is an issue. However, as previous rumors have been hinting, Android Marshmallow 6.0 may make its way to the PRIV in the near term.

Expansion into Japan and Mexico will lead to increased market share in the world. He again spoke about the ability of the PRIV to be an excellent phone. In terms of know-how and branding power, Mr. Chen currently has no intentions of selling the hardware business. He also revealed that the company has $2.6 billion in cash in the case there is a need for any M&A.

On the topic of security and privacy, Mr. Chen stated that a company needs to be a good citizen first, and then be a business. While he boasted that BlackBerry servers are one of the most secure ones in the tech world, he didn’t shy away from stating that the company does help the government on occasion. He revealed that in the case there are any subpoenas, the company follows through as the public good is also a concern for the company.

In response to the recent Apple Inc. (NASDAQ:AAPL) vs. FBI battle, Mr. Chen stated that the tech world is changing. Encryption has spiked to the top of the agenda for users, companies and the government alike. He added that there was a desperate need for a balance between all these parties. The CEO knocked on wood on saying that BlackBerry servers are secure and there are no back-doors of any sort.

When asked about what he would say to CEO Tim Cook on the encryption debate, he reiterated his stance on finding reasonable ground between the government and tech companies. He added that there may not be any companies in case the country is not secure. He added that all parties involved need to work out together to keep everyone safe.

In any case, BlackBerry’s future seems to be in good hands with Mr. Chen. However, we are excited to see what kind of smartphones the company can launch this year. Unlike Apple’s rumor mill, there is little to nothing known about these two units.However, there are rumors that two phones, codenamed “Rome” and “Hamburg” are going to be another jab by the company at the smartphone world. It all depends on pricing, ASPs and other factors that will decide BlackBerry’s fate this year around.