Z3 Launching next week ? Interesting read
It seems like Chen will be in Indonesia next week to launch or at least announce the Z3
Chen travelling the world to promote BlackBerry
BlackBerry Bold
The Canadian Press file photo
BlackBerry will do a limited production run of the Bold smartphone because of feedback from customers.nextplay/pausepre1/2
By Terry Pender
WATERLOO � BlackBerry chief executive officer John Chen is living out of a suitcase as he executes an ambitious recovery plan for the once-leading smartphone maker that lost $5.9 billion US in its most recent fiscal year.
Chen is flying around the world meeting with business and government customers as he engages in what he calls "high-touch marketing." The electrical engineer and former chief executive of Sybase Inc. is currently on a tour to meet 40 BlackBerry customers. It ends in New York City for interviews with reporters and analysts.
"The problem is, I really don't mind travelling and meeting with people and all that, but there are physical limitations," Chen said recently during a meeting with reporters after the release of the company's fourth-quarter financial results.
"I am living hotel to hotel to hotel, it is like packing and unpacking, packing and unpacking," he said. "This week I have been in so many places I don't even remember."
Next week, Chen flies to Indonesia for the official launch of the Jakarta Z3 � the new large touch-screen smartphone BlackBerry produced in partnership with Taiwan-based Foxconn for the Indonesian market.
Typically, Chen and his team fly into a city for breakfast briefings with chief executives, chief information officers and executive officers to talk about risk management, mobile-data security, identity management and identity security.
"We are focusing on that around the world," he said.
Chen said the biggest challenge he has faced since taking over the reins as chief executive at BlackBerry last November was the need to make multiple changes at the same time.
"There are so many things that need to be fixed, kind of in parallel, otherwise it takes too long to fix everything sequentially," he said.
The speed and depth of the changes Chen initiated underscore how far BlackBerry had fallen in the competitive smartphone market, and how dire the situation was.
Five years ago, BlackBerry had 20,000 employees worldwide and about a 20 per cent share of the global smartphone market. The payroll is dropping close to 7,000 and the company's market share is less than two per cent.
Former BlackBerry chief executive Thorsten Heins announced the latest round of job cuts last September � 4,500 jobs or 40 per cent of BlackBerry's remaining workforce. When Chen took over two months later, there was no turning back on the workforce reductions.
"The reality of the mathematics when I came in, in November, only left me one choice � to let that project complete," Chen said. "But I also realize that you can not ever cut yourself to glory."
The layoffs are one of the most difficult parts of the turnaround plan, Chen said.
"I fully understand why employees have been very negatively affected, and the morale is obviously not as high as I would like," he said. "I do believe people are getting back to work, which is a good thing. I think they are trying really hard to stay focused."
The last of the layoffs are scheduled to occur by the end of May, and will leave BlackBerry with a global workforce of 7,000. Since the latest round of layoffs started last September, 1,140 BlackBerry employees have been let go in Waterloo Region.
The company won't say how many people it will employ in the region when the layoffs are done. At its peak, it had about 10,000 employees in the region, working out of about 15 buildings in Waterloo and Cambridge.
The local job cuts include the layoff in mid-March of 120 employees in the wireless technology group. In its day, this group of electrical engineers and coders was among the top wireless tech teams in the world. They designed and built the phones and operating systems that made Research In Motion � renamed BlackBerry early last year � world famous for its security and speed.
There was talk last December that Marvell Technology Group, one of the world's biggest makers of computer chips, was going to buy the wireless technology unit. Chen confirmed a deal was proposed but it fell through for reasons that he won't disclose.
Chen said BlackBerry has the patents and technology developed by the group and can use both whenever needed. It no longer is necessary to have engineers in-house producing that kind of technology, he said.
"At one time this got to be a leading function, but today there is technology out there that is already designed into a chip set."
That's the approach BlackBerry is taking with the Jakarta Z3 and its partnership with Foxconn. Foxconn used existing technology and built a new phone priced for less than $200 for emerging markets. After its release in Indonesia next week, the phone will be rolled out later this year in Thailand and India.
Chen's reputation as a turnaround wizard was cemented by his performance at Sybase. The software company was losing money when he took over as CEO. It reported profits for 55 consecutive quarters before he left.
If Chen is able to engineer a similar turnaround at BlackBerry, the company will look very different in the future. In Chen's words, it will be focused on software, services and messaging. To get there, it must first return to its roots for at least two years to generate much-needed revenue to finance the turnaround and transition.
The company will soon do a limited production run of the Bold smartphone, which operates on the older BlackBerry 7 operating system. With its keyboard and a "utility belt" that includes a track pad, cut-and-paste, send and refresh buttons, it was among BlackBerry's most popular products.
Corporate and government customers asked for it and Chen is responding. The plan is simple enough � keep those customers happy with the return of the Bold until BlackBerry brings out a new phone that will provide what they are looking for.
The new phone, dubbed the Classic, is slated to be unveiled in November. It will be a marriage of the Bold's hardware with the software advantages of the newer BlackBerry 10 system, which has a superior web browser and multimedia offerings.
Chen made it clear that the production run for the Bold and introduction of the Classic should not be interpreted as a wholesale return to the smartphone business. Hardware and handsets will be part of the equation for at least two years, but after that it is anyone's guess.
"I hope it's not confusing to others that all of a sudden, 90 days later, I shift gears," Chen said. "It is nothing to do with that. I mean software and services going forward are still going to be where the growth engine is going to come from, and messaging."
When Chen refers to software, he is talking about QNX software. QNX, an Ottawa-based company acquired by BlackBerry in April 2010, has an operating system that is touted as being the most reliable in the world. It is used in mission-critical applications such as nuclear power plants.
The auto industry has emerged as a big and growing market for the software. It is now used in more than half of all new cars. In the emerging world of connected and smart cars, the software monitors the location of vehicles, tells owners when maintenance and repairs are needed and powers infotainment systems, among other things.
Chen wants to expand the reach of QNX software into the medical field, and any market that needs machine-to-machine interactions.
Generating revenue and profit from BlackBerry's popular BBM messaging system is another priority for Chen. BBM has more than 85 million users, who each send or read 11.5 messages a day on average.
Chen plans to monetize BBM by selling specially designed emoticons called stickers and offering sponsored channels that will allow advertisers to connect with users. A pack of stickers can be downloaded for $1.99 at the BBM Shop.
"If you measure by revenue in the next couple, two or three years, I think QNX will be a bigger operation than BBM," Chen said. "Because the connected car world seems to be taking a lot of momentum."
As part of cost-cutting, BlackBerry dismantled its enterprise sales teams. Chen is rebuilding the sales force, with teams set up to focus on government, financial, defence, security and corporate sectors. In the future, a sales team devoted to the medical sector will be organized.
"I won't rule anything out, but since our aspirations for the long term are going to be machine-to-machine interactions, software has to be a really huge part going forward," Chen said.
In the meantime, there will be lots of packing and unpacking as Chen travels the world to convince existing and prospective customers to go with BlackBerry.
"There will be one day when the map and the market will tell us which way to go," he said. "I can assure you, for me, it's not a religion. It's business."
Chen travelling the world to promote BlackBerry