Chen Is Finally On the Right Path For Devices
- When Chen inherited BlackBerry two years ago he took over at a time the devices business was in a shambles. There were many big problems. The biggest problem was that Blackberry as a company was structured to sell tens of millions of devices a year. Chen projected that 10 million devices a year was more reasonable. He cut costs (jobs) so that BlackBerry could be profitable selling far fewer devices than it had in the past.
It didn't work.
Why didn't it work? Chen assumed (incorrectly, it turns out) that BlackBerry could meet its smaller volume projections by selling to government and enterprise. As a result, Chen built enterprise focused devices (Passport, Classic, and Leap) and ignored the consumer market. In doing this I think Chen overlooked the problem that got BlackBerry into hot water in the first place: People in Enterprise are also consumers too. People don't want a phone that doesn't have the apps they want. A secure phone is not a big enough draw to compensate for the lack of apps. Also, and I have no numbers to back it up, but I suspect that in spite of the fact that BB10 had weakness as a consumer platform, consumers still bought a higher percentage of devices than anticipated because of brand loyalty or because of messaging features. In other words, BlackBerry wasn't that successful at selling to government and enterprise. Also, let's face it, over the last two years, BlackBerry did everything it could NOT to talk about devices and to stress that it was not just a devices company. It's hard to sell a product when the company that makes it gives it a half-hearted "here it is if you want it" sales pitch.
But, if you look at BlackBerry's revenue, BlackBerry is still very much a devices company with 40% of its revenue coming from device sales. With other parts of the business either growing but not producing as much revenue as expected or not growing at all, it makes sense to try to grow the devices business.
If you accept that in order for a phone to be successful these days you need to have apps, it is easy to see that a Google blessed Android phone is really the only alternative. So, this is really BlackBerry's only real chance of saving its devices business. Plus, Chen is right to make this phone stand out from the crowd with BB apps, a qwerty keyboard, and a focus on privacy. Blackberry is offering something that you can't get anywhere else. If he fails, you can't say he didn't try.
I think Chen could have had a better initial devices strategy. He was right to cut costs, but he didn't focus on the product that he was selling. As a result, he didn't sell many phones. This is now water under the bridge but is something for an interesting debate.
With Priv, we for the first time see Chen out there trying to sell a phone. What this means is that the company is now organized for the purpose of selling a phone for the first time under Chen's leadership. Assuming that the product is good and the software isn't buggy, I think Priv will be successful.09-26-15 07:41 AMLike 7 - I agree with a lot you are saying but this isn't the first time Chen has tried to sell a phone. That's giving him way to mug of a pass. He tried to sell the Passport, Leap, and Classic, and failed hard. This isn't "Now Chen is finally running the ship." It's his last ditch effort to make an impact in handset sales.09-26-15 07:46 AMLike 0
- If they had released an all touch flagship things would be different. Not much but thru would have been different.
Posted via CB10IndianTiwari likes this.09-26-15 07:52 AMLike 1 -
The problem is that a lot of people such as myself haven't been buying the next device, because there is no next device to buy. We have been patiently waiting so therefore we have not been purchasing therefore device sales have been plummeting.
I believe we know what's going on more sometimes than Chen and the folks at BlackBerry.
Posted via CB10Jakob Greve likes this.09-26-15 08:02 AMLike 1 - I agree that choosing not to cater for consumers and satisfy their eager for decent and modern specs has drastically affected sales etc.
But Chen can't take all the blame alone. BlackBerry came late to the party but not launching the full touch BlackBerry 10 phones back then when there was the first iPhone followed by the rise of the Droid.
Maybe he is doing the right decisions now to save the company. But I'm sure that we consumers, specially the full touch users, are not happy.bBOLD723 likes this.09-26-15 08:03 AMLike 1 - I couldn't agree more. We have bb10 at work and the biggest problem is apps. Either the app doesn't work as expected (andriod app) too slow to load or buggy or its just not available on either BlackBerry World or Amazon (Google play is not allowed).
This leads to I hate BlackBerry what a crappie phone. They never go beyond this experience, they don't want to bother with the phone anymore than they have to. Answer emails answer calls. Take out their personal phone for everything else.kbz1960 and RigoMonster like this.09-26-15 08:12 AMLike 2 -
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Posted via CB1009-26-15 08:26 AMLike 0 -
Or even if BlackBerry had more competitive specs on the classic instead of the warmed over ones it does have.
If you listened to the earnings call yesterday, Chen said that BB10 driver costs are an issue. I bet he went with older specs to keep development costs down. That gamble didn't pay off.
Posted via CB10RigoMonster likes this.09-26-15 08:28 AMLike 1 - I agree with a lot you are saying but this isn't the first time Chen has tried to sell a phone. That's giving him way to mug of a pass. He tried to sell the Passport, Leap, and Classic, and failed hard. This isn't "Now Chen is finally running the ship." It's his last ditch effort to make an impact in handset sales.
Not a recipe for success.
Posted via CB1009-26-15 08:32 AMLike 0 -
Agreed. I personally believed that if it had the SD801, 2GB RAM, 4" 1200x1200 screen (random resolution..lol), 13mp camera with OIS, and 2600mah removable battery, it would have been an instant hit. Although BB10 still works great with the older hardware (while still at time showing its age), it just feels to me that the Classic was designed to fail.09-26-15 08:56 AMLike 0 -
I think that a flagship all touch with a fully compatible Android runtime might have sold well enough to support a 10 million devices a year strategy.
Posted via CB1009-26-15 09:18 AMLike 0 - When you are officially stuck with Amazon apps and the Fire phone flopped hard what does fully compatible mean and how could that improve BB10 sales?
Passport SE kbz1960 and sentimentGX4 like this.09-26-15 09:49 AMLike 2 -
Posted via CB1009-26-15 09:57 AMLike 0 - When Chen inherited BlackBerry two years ago he took over at a time the devices business was in a shambles. There were many big problems. The biggest problem was that Blackberry as a company was structured to sell tens of millions of devices a year. Chen projected that 10 million devices a year was more reasonable. He cut costs (jobs) so that BlackBerry could be profitable selling far fewer devices than it had in the past.
It didn't work.
Why didn't it work? Chen assumed (incorrectly, it turns out) that BlackBerry could meet its smaller volume projections by selling to government and enterprise. As a result, Chen built enterprise focused devices (Passport, Classic, and Leap) and ignored the consumer market. In doing this I think Chen overlooked the problem that got BlackBerry into hot water in the first place: People in Enterprise are also consumers too. People don't want a phone that doesn't have the apps they want. A secure phone is not a big enough draw to compensate for the lack of apps. Also, and I have no numbers to back it up, but I suspect that in spite of the fact that BB10 had weakness as a consumer platform, consumers still bought a higher percentage of devices than anticipated because of brand loyalty or because of messaging features. In other words, BlackBerry wasn't that successful at selling to government and enterprise. Also, let's face it, over the last two years, BlackBerry did everything it could NOT to talk about devices and to stress that it was not just a devices company. It's hard to sell a product when the company that makes it gives it a half-hearted "here it is if you want it" sales pitch.
But, if you look at BlackBerry's revenue, BlackBerry is still very much a devices company with 40% of its revenue coming from device sales. With other parts of the business either growing but not producing as much revenue as expected or not growing at all, it makes sense to try to grow the devices business.
If you accept that in order for a phone to be successful these days you need to have apps, it is easy to see that a Google blessed Android phone is really the only alternative. So, this is really BlackBerry's only real chance of saving its devices business. Plus, Chen is right to make this phone stand out from the crowd with BB apps, a qwerty keyboard, and a focus on privacy. Blackberry is offering something that you can't get anywhere else. If he fails, you can't say he didn't try.
I think Chen could have had a better initial devices strategy. He was right to cut costs, but he didn't focus on the product that he was selling. As a result, he didn't sell many phones. This is now water under the bridge but is something for an interesting debate.
With Priv, we for the first time see Chen out there trying to sell a phone. What this means is that the company is now organized for the purpose of selling a phone for the first time under Chen's leadership. Assuming that the product is good and the software isn't buggy, I think Priv will be successful.
Posted via CB1009-26-15 09:59 AMLike 0 -
I think he's always tried to sell handsets, but thought that businesses would be quick to bring in fleet handsets with the Leap, power users would buy the Passport in droves, and that lovers of past BBOS devices would run to the Classic. Unfortunately he was wrong on all counts. Pretending that he wasn't trying is essentially giving him a pass for handsets not selling well, which I wholeheartedly disagree with.09-26-15 10:06 AMLike 4 - Chen has never said that devices weren't important for Blackberry. In fact he's said the opposite. He's said numerous times that devices are still bringing in the majority of revenue for BB and that there was no way they would or could stop making them.
I think he's always tried to sell handsets, but thought that businesses would be quick to bring in fleet handsets with the Leap, power users would buy the Passport in droves, and that lovers of past BBOS devices would run to the Classic. Unfortunately he was wrong on all counts. Pretending that he wasn't trying is essentially giving him a pass for handsets not selling well, which I wholeheartedly disagree with.
Posted via CB1009-26-15 10:49 AMLike 3 -
The audience simply does not exist for an OS without Apps. Chen can create a phone with wings and it still wont sell with BB10.
(and I luv BB10, but I'm one of the 0.10% that doesn't use many Apps)app_Developer and kbz1960 like this.09-26-15 11:06 AMLike 2 - I think BYOD also hurt blackberry. People bringing their own phones are brining the ones they are choosing for personal use. Its one thing to sell to an agency that are issuing phones to workforce, but another animal when your consumer is also a business user with the freedom to choose.
Posted via CB10DolemiteDONS likes this.09-26-15 11:35 AMLike 1 - No. But the difference is that this is the first phone with an OS demanded by the public, and not an OS used by a niche group. When people have been leaving BB10 every quarter for Android and iOS, primarily for its Apps, it's hard to get them to return with the pitch, "please return, it's a terrific OS.....but we still have no Apps". BlackBerry and their few pilot fish have been swimming upstream.
The audience simply does not exist for an OS without Apps. Chen can create a phone with wings and it still wont sell with BB10.
(and I luv BB10, but I'm one of the 0.10% that doesn't use many Apps)09-26-15 11:47 AMLike 0 -
For what's it worth though, he doesn't seem to really be into any device his company has offered. He's probably wanted to shut the device business down since the day he stepped in. I imagine he's just going through the options (Amazon, Green light the Passport, push the Classic, try low end Leap, now try with Android) , so that at the end of the day, he can shut it down without being blamed (mostly internally I imagine) for 'not trying'.
Posted via CB1009-26-15 11:57 AMLike 4 - I, like most people I know only have one cell phone. My money is going to tge outfit that can handle MOST of what I need done in a reasonable fashion.
I did buy a Z10. And it failed miserably. While I managed to accomplish many tasks on it, I still had to rely on my PC for others. Not only that, but I had hardware issues as well. All this happened when Thor was captain of the ship.
At this point, they have to try some strategy to try gain some traction in the handset market or else it's lights out BlackBerry handset division.
Posted via the CrackBerry App for Android09-26-15 12:00 PMLike 0 -
- No. But the difference is that this is the first phone with an OS demanded by the public, and not an OS used by a niche group. When people have been leaving BB10 every quarter for Android and iOS, primarily for its Apps, it's hard to get them to return with the pitch, "please return, it's a terrific OS.....but we still have no Apps". BlackBerry and their few pilot fish have been swimming upstream.
The audience simply does not exist for an OS without Apps. Chen can create a phone with wings and it still wont sell with BB10.
(and I luv BB10, but I'm one of the 0.10% that doesn't use many Apps)
He could have solved the app problem on BB10. That's not insurmountable. But, it would have meant spending money instead of hoarding it. It would have meant doubling or tripping the staff in Ottawa at QNX and BlackBerry Sweden instead of halving the staff in Ottawa and outright closing BlackBerry Sweden (TAT). It would have meant putting pressure on automotive OEM's to use BlackBerry 10 as a whole instead of just QNX as middleware. If they said no, then it would have meant stepping up and directly competing with automotive OEMs by offering a complete package based on BlackBerry 10. It would have taken a strong effort to make BlackBerry 10 strong everywhere that QNX is strong and needs a UI. If instead of Ford using their own App Platform with Sync 3 they had to develop apps with Cascades, there would be a Netflix app, a Pandora app, a Tidal app, an Air BNB app, and all the navigation and social apps that consumers want in BlackBerry World because there is an incentive for these app publishers to make apps that work in cars. More app selection equals more sales and more sales equals more developer interest which in turn equals more apps. It would have had to have been a planned snowball effect. Universal apps is exactly the strategy that Microsoft and Apple are using and it could have worked for BlackBerry as well. But they didn't try it.
At the same time, they should have nurtured and grown the services offered in BlackBerry World rather then strip them all out and say, consumer stuff is what we have the Amazon App Store for. The Amazon deal was absolutely, without doubt, one of the worst business decisions ever made in the history of humanity. It never should have happened or even been considered. It was the first sign that BlackBerry sent out publicly that they did not think BlackBerry 10 could work as a Platform. It irreparably damaged developer relations, it showed a lack of confidence in their own product, and stripping out the native services in BlackBerry World when there were no alternatives from Amazon pissed off customers.
Basically, John Chen managed the hardware business and BlackBerry 10 as poorly as a 5th grader who's only experience was running a lemonade stand in their front yard last summer would have.
He had no vision or plan for it. He sabotaged it from pretty much his first day on the job and now he's ready to call it quits. But perhaps a wind down of the devices business was what the board hired him for? Seems that way.
John Chen is not a turn around expert. He hasn't turned anything around at BlackBerry that any other CEO couldn't have done. He's literally buying the MDM customers he needs to meet his goal from Good. He's a cost reduction expert. He's slashed costs and hoards the cash pile. He will be the death of BlackBerry Handsets and will burn through that $3 billion cash reserve to try and grow the licensing business.09-26-15 12:09 PMLike 6
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Chen Is Finally On the Right Path For Devices
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