[Corbu]

Fresh from The Jakarta Post:

Executive Column: BlackBerry wants to get back on track | The Jakarta Post

Canadian cell phone maker BlackBerry, which has lost its market share in the country’s phone market, has recently released a low-cost touchscreen device, the Z3 “Jakarta edition”, to win back Indonesian consumers from iPhone and Android-based rivals. During a recent visit to Indonesia, BlackBerry CEO John Chen a telecommunication industry veteran and former Sybase CEO spoke to The Jakarta Post’s Khoirul Amin about his strategy to turn the luck of his company around. Below are excerpts of the interview:

Question: BlackBerry has lost half of its staff with its market share falling all over the world. How will you bring the company back to life?

Answer: I came in here for a turnaround and I hope that everybody knows what we are doing is focusing on bringing new products into new markets or existing markets, bringing innovation, focusing on doing the work for increasing market share, getting the company back on track.

What I am not focusing on is failure. I think the company is in a much better position today. Has everything been fixed? No. I am still working on that, but I think we have made tremendous progress in the last six months.

I am focusing on new products, in devices, like you saw in the Z3, that are more focused on the consumer space. We [also] have a lot of products in the enterprise spaces coming out […].We are looking at releasing our new enterprise offer […]. We have now set up BlackBerry Messenger (BBM) for enterprises called e-BBM, starting in June this year. So, there are a lot of good things and we are doing a lot more on QNX, our better microkernel operating system. We are doing a lot of things, but the whole idea for BlackBerry in the future is we will build infrastructure that connects everything: mobile, Internet protocol [IP] addresses, everything.

BlackBerry suffered US$423 million in losses in the first three months of this year. How will you turn that situation around?

I said we are going to turn cash flow neutral or positive by the end of our fiscal year. When I came in my first quarter, we used $1.1 billion in cash. That is huge. Last quarter we used $775 million in cash. So, I said by the end of the fiscal year we will be breaking even on cash flow or making, generating cash. To me, that is the first sign of stability.

It will be from phone, server, QNX, e-BBM, there will be a lot of things. We will control costs and expenses, we will be having an arrangement with Foxconn. Then a year later, sometime in the next fiscal year, we will be profitable. That’s what we said.

How do you transfer that positive energy to your subordinates so that they have a similar vision and energy?

First of all, I have made a lot of changes to the management team and we will continue to make changes to bring in more energy. But there are a lot of BlackBerry employees that have gone through a lot in the last two years and are looking for that energy. We have a lot of good people in the company. I have brought some changes in leadership, probably not because they are not good leaders but we cannot think alike and I cannot afford the time.

We do not have much time. I know that there is no time to debate it and this is the only way to turn the company around […] we have to focus on execution. But I think that a lot of people in the company that have that energy.

If you look at what we have done as a company in the last four months, we were able to put [the Z3] together and launch it in a foreign country [Indonesia].

I am very pleased that we can execute it. We had a couple of issues that we had to resolve in the last four months, some are products, some of them are processes, but both our sales team and Foxconn’s team overcame them. We worked through Christmas and New Year, which are important for people in the US and Canada, and we worked through the Chinese New Year, which is important for the Taiwanese and Chinese. When the world talks about negative things, let us talk about positive things.

You have just launched the Z3 in Jakarta. Why Jakarta and how important is Indonesia for your company?

It is my recognition and my statement that customers are important to us and that Jakarta has a lot of customers, Indonesia has a lot of customers. We want to make sure that they know after the last two years we have been busy fixing our problems and when we come out, we are coming out here first.

I hope that Jakartans have something that feels like pride. This is the first step of everything, it will be interesting.

In terms of Indonesia, I know this is a very big consumer market so far. It is also one of the biggest BBM markets for us. But from our revenue perspective probably not one of the top because 80 percent of our customer base is in the so-called regulated industry, such as the governments, the banks, the healthcare system and the judicial system.

How will you compete with other phones from competitors such as iPhone and Android-based phones which have become increasingly dominant in Indonesia’s market?

They are very focused on consumers. We have a very strong hold in enterprise. We do compete in the consumer space, and the product we launched [the Z3] is a very competitive product, especially since our brand is really big here in Indonesia.

I hope to sell the Z3 a lot, like a million units or something. But I am actually more focused on market share. I want to increase our market share. Whatever that account is, very honestly, I have never focused on accounts and you know I always tell people the way I determine whether it will be successful is how well obviously the market receives an under $200 [phone] with our software, with our brand on it, the quality that we have and security that we have.

And secondly, does that get us to win market share from this point? We have been losing market share in the last two years, and I would like to turn that corner. If I can turn that corner, then I can say that is successful.

Do you have any plan to launch other products besides cell phones in Indonesia?

If we will do another thing, we will probably go to phablet. I think if you look at our strategy and if you look at where the market goes, there is definitely a good market for something between a phone and tablet.

I think the phablet could be early, the tablet is already late. That is not a bad thing, because you can bring new technology. But, if I have the opportunity I will go to phablet. […] we will build what the market wants.

[Banco]

the tablet is already late

That's an interesting comment.

[Ment]

Only 20% of revenue is from the consumer market, that has to be troubling. It means there won't be much to keep it on if it continues to lose money.

Wish the reporter asked him about the Z3 supply chain issues. If you show your friend/family the new Z3 Jakarta and they can't get a regular Z3 then you've flushed your million device goal down the drain.

[BroncoVAL]

"Do you have any plan to launch other products besides cell phones in Indonesia?

If we will do another thing, we will probably go to phablet. I think if you look at our strategy and if you look at where the market goes, there is definitely a good market for something between a phone and tablet.

I think the phablet could be early, the tablet is already late. That is not a bad thing, because you can bring new technology. But, if I have the opportunity I will go to phablet. […] we will build what the market wants."

That's the way to go!
Blackberry must follow the consumers' wishes and not try to compete with Apple. They have to wait the ipad monopoly begins to fade, and the phablet would be a great strategy to introduce larger consumers base to BB10.
Once they appreciate the alternative they would more easily choose a BB phone or at least rouse their curiosity about Blackberry's revival.
If Mr. Chen could be right and stop the cash loss by the end of the fiscal year that would be a huge achievement.
Until now i really like his strategy and hope the market will meet positively the next devices (i will certainly buy the windermere)

[Playbook007]

Chen is doing it right. He must stabilize cash flow. He must make it positive. Positive cash flow is more important than advertising dollars, that fall on deaf ears.

Posted via CB10

[birdman_38]

Only 20% of revenue is from the consumer market, that has to be troubling.

Why is it troubling? Mr. Chen would likely want to see this number reduced even further. The less reliance on the fickle consumer market, the better.

[BBPandy]

The guys over at UTB did a nice write up on this article. Especially looking at the 1 million statement.
http://utbblogs.com/blackberryworks/...-in-indonesia/

Imagine 1 million Z3's sold in Indonesia alone!
That would be awesome

Posted via CB10

[AnimalPak200]

Chen is doing it right. He must stabilize cash flow. He must make it positive. Positive cash flow is more important than advertising dollars, that fall on deaf ears.

Posted via CB10

Well, advertising dollars are much more effective when there is a vague "generally-accepted" knowledge about the company that is positive. If everyone thinks the company is about to go bankrupt, advertising will be considered as a desperate last gasp. If the company is regarded as being in a commanding position, advertising simply has to fill in some details.

It's definitely more important to get that "BlackBerry posts a profitable quarter for the first time in ___ time." headlines (which is essentially free brand advertising).

Posted via CB10

[Ment]

Why is it troubling? Mr. Chen would likely want to see this number reduced even further. The less reliance on the fickle consumer market, the better.

He may be resigned to it but no CEO of a smartphone company wants to be relegated to enterprise. The enterprise landscape is changing, more companies support BYOD than ever before meaning less smartphones sold by BB. Unless you are saying Chen wants to rely on services to bring the company back, if so its a much smaller company.

The guys over at UTB did a nice write up on this article. Especially looking at the 1 million statement.
John Chen – ‘I Hope To Sell Over 1 Million BlackBerry Z3′s In Indonesia’ | UTB Blogs

Imagine 1 million Z3's sold in Indonesia alone!
That would be awesome

Posted via CB10

He better get on the horn with Foxconn then cause they aren't helping him.

[allengeorge]

Hmm. I don't think the Z3 sales are spectacular. If they were he would have highlighted it..

[TioPepe78]

Z50 Phablet, I want that

[BBPandy]

Hmm. I don't think the Z3 sales are spectacular. If they were he would have highlighted it..

He did highlight it.
If Z3 sales were not doing well he wouldn't have said he would like to sell a million of them in Indonesia alone. Also they wouldn't be sold out all over Indonesia with resale values of up to 40% above retail.

Posted via CB10

[jr4941]

The UTB blog sounds a little too optimistic for me. I'm hoping that Chen is being realistic about his numbers, but time will tell.

[birdman_38]

He may be resigned to it but no CEO of a smartphone company wants to be relegated to enterprise. The enterprise landscape is changing, more companies support BYOD than ever before meaning less smartphones sold by BB. Unless you are saying Chen wants to rely on services to bring the company back, if so its a much smaller company.

That's what BlackBerry is working towards as we speak. Keep in mind they laid off half their staff the past couple years.

[web99]

Z50 Phablet, I want that

Whenever it comes out, I'll definitely get one

[WWBlondieDo]

The guys over at UTB did a nice write up on this article. Especially looking at the 1 million statement.
http://utbblogs.com/blackberryworks/...-in-indonesia/

Imagine 1 million Z3's sold in Indonesia alone!
That would be awesome

Posted via CB10

I totally agree with this article. The fact that Chen even mentions selling 1 million units in Indonesia alone hopefully means that he already knows he's hit that goal. With how careful he normally is when it comes to setting expectations, I can't imagine that he would just throw that out there.

I do worry, however, that if he doesn't report 1 million Z3s sold when the ER comes out, that'll be the only thing people will focus on - no matter how good the ER is itself...

Posted via CB10

[Ment]

That's what BlackBerry is working towards as we speak. Keep in mind they laid off half their staff the past couple years.

Yes but if they get out of consumer entirely another round of large layoffs is coming. They can do what they are doing now, concentrate their efforts on profitable segments and cost cut everywhere else but they've got to come back to it eventually when things stabilize.

I totally agree with this article. The fact that Chen even mentions selling 1 million units in Indonesia alone hopefully means that he already knows he's hit that goal. With how careful he normally is when it comes to setting expectations, I can't imagine that he would just throw that out there.

I do worry, however, that if he doesn't report 1 million Z3s sold when the ER comes out, that'll be the only thing people will focus on - no matter how good the ER is itself...

Posted via CB10

He hasn't said there were 1 million sold thats just what he hopes will happen down the road. The on the ground reports in the Z3 forum indicate there are very few if any non-Jakarta (25k limited edition) Z3s in consumer hands now, certainly not anywhere near a million or even 100 thousand.

[belfastdispatcher]

Here we go again, Phablet? Are you kidding me JC?

Going where the market is going will only result in late to market copycat devices from BB.

[Powdah]

Hope he makes the Ptablet close to a 6" screen

[amjass12]

'if the opportunity arises'

I'll see you in the very distant future phablet... maybe

Posted via CB10

[Rello]

Here we go again, Phablet? Are you kidding me JC?

Going where the market is going will only result in late to market copycat devices from BB.

Well like he said, its not necessarily bad to be late if you can come with new technology. Now im not really sure if BB can pull that off considering their track record lol, but i do agree with that statement very much.

What kind of devices do you think they should be producing?

[Glenn Biddle]

Why are people here being so intentionally miss leading. To say that people will be disappointed if BlackBerry didn't sell a million Z3s in the upcoming ER report is completely ludicrous. Mr Chen stated that they hope to sell a million Z3s in Indonesia. To hope that they did this on the first two weeks that it has been on the market is a ridiculous because that is all this ER is going to take in. It is obvious that you and people like you are trying to throw these numbers out there in order to inflate people's expectations. I assume that your intention to be here after the ER to complain on how they BlackBerry didn't come any where near these inflated expectations and how Mr Chen lied about this or that. I can only assume that you have some ulterior motive.

Posted via CB10

[BBPandy]

I totally agree with this article. The fact that Chen even mentions selling 1 million units in Indonesia alone hopefully means that he already knows he's hit that goal. With how careful he normally is when it comes to setting expectations, I can't imagine that he would just throw that out there.

I do worry, however, that if he doesn't report 1 million Z3s sold when the ER comes out, that'll be the only thing people will focus on - no matter how good the ER is itself...

Posted via CB10

There won't be a million Z3's being reported sold in the upcoming ER. The Z3 came out right at the very end of the quarter...hopefully next ER will report a million plus though

Posted via CB10

[NotGoodIMO]

Only 20% of revenue is from the consumer market, that has to be troubling. It means there won't be much to keep it on if it continues to lose money.

This is actually a good thing. There is not much to lose in the consumer market. Most of the people who are left are most likely hardcore Blackberry fans. With affordable BB10 devices, I think Blackberry now has much better chance of gaining market share. Also, in the enterprise space, Blackberry is going to gain market share very rapidly with BES 12.

[bakron1]

I like what Mr Chen said about stopping the bleeding and trying to get some positive cash flow into the company, as a business person myself, I completely understand this.

Once the bleeding of the cash has stopped and hopefully the z3 has some success in the developing countries, I don't look at the launch day and first month sales, because those can be deceiving. I look at the long term sales, which will indicate whether the z3 was a success or not.

I am also hoping that BlackBerry can introduce a couple of high end devices for the consumer market this year? I don't like the classic because I not a physical keyboard person anymore.

An updated version of the z30 with an HD screen, quad core, 32/64 gig with 10.3? I would be the first person in line to buy one.

Send from my lovely z30 on T Mobile USA