Blackberry's CEO Takes Long-Term View John Chen, who took over at the company in November, discusses his high-stakes plan to return to profit
Just five years ago, BlackBerry Ltd. accounted for roughly half of the smartphone market in North America. Today its share is a mere 0.6%, according to research firm IDC. As consumers have flocked to Apple and Android-powered phones world-wide, the Waterloo, Ontario-based firm has faltered. For its fiscal fourth quarter ended March 1, the company reported a net loss of $423 million.
Chief Executive John Chen was drafted to take over the company in November, and is tasked with reversing the decline.
Mr. Chen has implemented a high-stakes plan to return BlackBerry to profit by outsourcing much of its hardware business to Taiwan's Hon Hai Precision Industry Co., known as Foxconn, which produces most of the world's iPhones and iPads.
BlackBerry's enterprise business�which provides secure phones and software to businesses and governments�has also been under pressure. It is unclear if the company can woo everyday customers to its new low-cost smartphone, which it released Tuesday in Indonesia, one of its last remaining strongholds.
In an interview in Jakarta at the launch event for the new Z3 phone, the 58-year-old Mr. Chen�a Hong Kong native who came to the U.S. to attend prep school in Massachusetts�discussed BlackBerry's long-term prospects, how his background in advanced mathematics helps to solve technology problems and his love for symphonies.
Edited excerpts:
WSJ: BlackBerry's market share has fallen globally while Android's has surged. Why should consumers buy a BlackBerry phone?
Mr. Chen: Android's strength isn't really the quality of the phone, which BlackBerry has. BlackBerry phones are always well put together. We have a great BlackBerry Messenger experience, a great operating system. And it's the most secure phone. Secure not only in data but in personal identity. Younger consumers love all kinds of apps, and BlackBerry runs 98% of all the Android apps. All BlackBerry die-hards know they can run Android apps.
WSJ: Are you convinced that BlackBerry can have a presence in the consumer phone space and not simply be enterprise-focused?
Mr. Chen: With our relationship with Foxconn and the ability to build a competitively priced phone with our operating system, it's an easy way for us to tell our consumers that we do care and we would like to pay back their loyalty. Also, in developing countries in Asia, today's consumer is tomorrow's enterprise. I'm really building a presence in the market that allows us to move up into the enterprise space.
I know there's been a lot of negative news about BlackBerry. I came in as a turnaround guy, so by definition, it isn't good. I've said it will take me a while to fix this stuff. But what people may not recognize and appreciate is that the company is really focused on execution. We're building great technology and software.
WSJ: The Z3 is approximately $191 dollars. Will you release an even cheaper, sub-$100 smartphone?
Mr. Chen: I'm not going to go down to a sub-$100 phone, at least not anywhere in the near future. I'd like to add more features. Someone asked me, could you ever sell a $400 phone again? The answer is yes, depending on what's in the phone.
WSJ: Five years from now, will BlackBerry be a global player or a more niche, enterprise-focused firm?
Mr. Chen: No, why would I do a niche thing? I got a lot of CEO offers before. I'd like to become a strong software and infrastructure provider of everything that connects to each other. Why would people buy from BlackBerry? Partly because of the know-how, patents and security. Today I'm building toward those goals. It will take a while but I have to first return the company to profitability.
WSJ: Is it personally difficult to run a company that is seen to be struggling?
Mr. Chen: A turnaround CEO is like an emergency room doctor. You have to act quickly, be decisive, not be phased by negative things. And you can't be emotionally involved. You have to be clinical. Because once you're emotionally involved you start not making the right decisions quick enough. Is it difficult? That's my job. That's what I do. My constitution is I love working on complex, high-risk, high-reward puzzles. It's actually exciting.
WSJ: How do you tackle technology-related problems?
Mr. Chen: The problems I'm solving are dynamic, they're not static. Everything from consumer preferences to enterprise priorities in terms of security or risk management. I studied electrical engineering, and this is like when you study nonlinear differential equations. The answer to those problems often times is a model, not an absolute. I love that. I know I'm dealing with fast-moving models.
WSJ: Are you an autocratic leader or more of a democratic leader?
Mr. Chen: I believe there's a time to discuss and a time to act. I don't like to confuse the two. I have a cadence with our management team where we put up problems, everyone goes to collect data and analysis, and when we come together every two weeks to tackle the decision points, I get advice from everyone, and then I decide. I like getting knowledge from my team, but like a model, the right decision changes with time. If you stay on a problem long enough, especially in technology, it changes. A nondecision is always wrong.
WSJ: What do you do to relax?
Mr. Chen: I used to read a lot and play a lot of golf. I now just play a lot of golf. I have a bad back and when I read I have bad posture. But I do like to read. I've been reading a lot of Chinese literature. I grew up in Hong Kong, and Chinese was somewhat forced on me. I never really appreciated that these people who died 3,000 years ago have something to say. Now I don't have to study it and I really appreciate it.
WSJ: What are your hobbies?
Mr. Chen: I go to a lot of symphonies. My entire family is quite keen on music. I always find that I can enjoy the piece much more if I understand when it was written by the composer and what was going through his life. You might hear a piece that sounds chaotic and angry, and if you know the composer was having a difficult time through war or with the passing of a loved one, you can really understand. Not everything is 1812 Tchaikovsky.
WSJ: What would a symphony of your life right now sound like? Would it be chaotic?
Mr. Chen: Oh no, I consider myself a very happy person. I'm very privileged and thankful. Being born in Asia and giving me an appreciation for the cultures here, and then studying in the U.S., I couldn't be better trained in being an entrepreneur. The opportunity of being a first-generation immigrant in the tech world centered around Silicon Valley in the 1980s and 1990s, I don't think anyone could have been luckier living through that era.
R�sum�
Work history: Before joining BlackBerry, Mr. Chen was chief executive of Sybase Inc. He also held senior positions at Siemens AG, Burroughs Corp. and Pyramid Technology Corp. He began his career as a Unisys Corp. design engineer.
Education: Mr. Chen has a bachelor's degree in electrical engineering from Brown University and a master's in electrical engineering from the California Institute of Technology.
Outside interests: Reading, golf and classical music.