1. wout000's Avatar
    Source: Did BlackBerry Just Become a Lean Start-Up? (BBRY)

    Less than four months into John Chen's tenure as CEO of fallen smartphone giant BlackBerry (NASDAQ: BBRY ) , it's clear that this company isn't your grandfather's BlackBerry. Smartphones running on the BB10 platform are still a part of the mix, but they have now taken a back seat to software and services initiatives.

    Over just a few months, BlackBerry has announced a large number of new strategic initiatives that will hopefully turn it into a more diversified tech company, rather than a pure-play smartphone maker. In other words, BlackBerry is moving fast and breaking things: i.e., acting like a lean start-up. This could be a sign of good things to come.

    BB10 phones: version 2.0
    Many investors -- myself included -- expected the release of new phones on the BB10 platform to revive BlackBerry's fortunes in 2013. After some hopeful signs early in the year, sales fell well short of the company's expectations. Not only did the all-touch Z10 fail to win converts from the iPhone and Android, the Q10 did not sell very well among the BlackBerry user base, despite its QWERTY keyboard.

    Did BlackBerry Just Become a Lean Start-Up?-blackberry-q10_large.jpg
    BlackBerry's Q10 phone turned out to be a flop (Photo: BlackBerry).

    This week, BlackBerry revealed its next generation of BB10 phones. On Tuesday, Chen showed off the Z3 smartphone (code-named Jakarta), which will go on sale in Indonesia in April and will eventually be sold in some other markets in Southeast Asia, where BlackBerry remains fairly popular.

    The Z3 will be priced below $200. That still won't match the sub-$100 Android phones that have shown up in recent years, but it will be much more affordable than prior BB10 devices.

    The Z3 is the first product of a partnership between BlackBerry and Foxconn announced back in December. Foxconn, which is already the largest global contract manufacturer of smartphones, will be responsible for procurement, manufacturing, and inventory management for the Z3, reducing BlackBerry's risk. This represents a completely new -- and hopefully profitable -- smartphone business model for BlackBerry.

    BlackBerry also announced that it will take another crack at high-end QWERTY phones. Many BlackBerry loyalists were apparently upset that the Q10 didn't have BlackBerry's classic function keys (menu, back, send, and end). Based on that customer feedback, the new Q20 will bring back these function keys. (Whether this design update will lead to better sales is still very much an open question.)

    Moving beyond smartphones
    The real story of the last few months at BlackBerry has been its move beyond smartphones. One area that Chen has been emphasizing is building BlackBerry Messenger, or BBM, into a profitable business. After Facebook bought rival messaging service WhatsApp for $19 billion, this seems like an even bigger priority. (WhatsApp has about 450 million monthly active users compared to 85 million for BBM, but that could still make BBM pretty valuable.)

    BlackBerry remains focused on the enterprise side of messaging. On Tuesday, the company announced "BBM Protected," which will offer a higher of level security and keep a record of chats; both features had been requested by enterprise customers. This is the first in what will eventually become a suite of business-oriented services available through BBM for a fee.

    The company is also simplifying pricing for its BlackBerry Enterprise Service, with two levels (silver and gold), in response to customer feedback. The new BES12 is designed to offer value-added capabilities beyond basic mobile device management (which by itself is expected to be a $4.8 billion market by 2017) to gold-level customers. This will include items such as tools for building secure mobile apps.

    The last key area for future growth is the QNX embedded OS. QNX is the dominant operating system in cars, and it appears to be on the verge of winning another convert in Ford. However, the bigger long-term opportunity that BlackBerry is pursuing is selling QNX into other industries. This will require figuring out how QNX could be useful in other applications.

    The risk of being a lean start-up
    The hallmark of a lean start-up is prioritizing flexibility in order to change the business model to meet the needs of potential customers. Rather than building a product and trying to sell it, a lean start-up figures out how it can help customers through a process that resembles trial-and-error.

    While BlackBerry is still working to turn the device business around, it is starting to act like a lean start-up in these other nondevice parts of the company. The three nondevice focus areas (BBM, BES, and QNX) currently represent capabilities more than products. BlackBerry is at the very beginning of figuring out how to deploy those capabilities as products and services that customers will pay for.

    However, unlike a typical lean start-up, BlackBerry is a highly visible public company that has had some high-profile miscues in recent years. False starts and minor failures are inevitable for any lean start-up. For BlackBerry, these hiccups could easily become magnified into market-moving investor panics.

    Thus, as BlackBerry sails into uncharted waters, the ride is likely to get a lot bumpier. Hopefully the reward will be worth it for shareholders.


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    JeepBB likes this.
    02-27-14 06:10 AM
  2. thurman's Avatar
    Nice article.


    Z10 STL100-3 >>>>>>>>Leaks 1055, 1259, 1925
    02-27-14 06:51 AM
  3. Troy Tiscareno's Avatar
    Horrible title, though.

    Did BB just fire ANOTHER 4900 people? Since when did a "lean startup" have MORE than 100 employees? Most have like 20.
    JeepBB, kbz1960 and richardat like this.
    02-27-14 11:56 AM
  4. sentimentGX4's Avatar
    Blackberry still has many of the same engineers, management, stakeholders, and partners of its past and it's still in the exact same industry. There is no such thing as a reset button as much as many bullish investors want BBRY valuated as a startup.

    TBH, the article is borderline insane. The article comes from Fool.com. On the bottom of every borderline insane article, Fool advertise their subscription service to read their full on insane investment articles that read like straight out from a Nigerian scam email. For example,

    The Death of Credit Cards

    The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them - but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless - and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days.
    Can you really take this website seriously?
    richardat likes this.
    02-27-14 01:04 PM
  5. JeepBB's Avatar
    Whilst it was an enjoyable read, I tend to agree that it's largely straw-clutching. As the guy above said, there isn't any reset button that BB can press.

    And, maybe it's proof of Betteridge's Law: "Any headline which ends in a question mark can be answered by the word 'no'"

    Betteridge explained the concept in a February 2009 article, regarding a TechCrunch article with the headline "Did Last.fm Just Hand Over User Listening Data To the RIAA?"
    This story is a great demonstration of my maxim that any headline which ends in a question mark can be answered by the word "no". The reason why journalists use that style of headline is that they know the story is probably bull****, and dont actually have the sources and facts to back it up, but still want to run it.
    Last edited by JeepBB; 02-27-14 at 02:39 PM.
    richardat likes this.
    02-27-14 01:11 PM
  6. lnichols's Avatar
    Lean startup would have far fewer employees. Now that they are starting to outsource the manufacturing, they need to get rid of the jobs associated with that part too.

    Posted via CB10
    02-27-14 03:11 PM
  7. RubberChicken76's Avatar
    Horrible title, though.

    Did BB just fire ANOTHER 4900 people? Since when did a "lean startup" have MORE than 100 employees? Most have like 20.
    Yeah - hell of a startup - 7000 employees+ and billions in annual revenue and tens of millions of existing customers. ;-)
    02-27-14 03:50 PM
  8. RubberChicken76's Avatar
    Lean startup would have far fewer employees. Now that they are starting to outsource the manufacturing, they need to get rid of the jobs associated with that part too.

    Posted via CB10
    they've been outsourcing manufacturing for years. Doubt there are many people working in any manufacturing capacity except maybe prototype production lines for the employees
    02-27-14 03:51 PM
  9. GTiLeo's Avatar
    by lean start up they mean goign back to the basics, which is what any company in a rebuilding stage has to do, go back to the basics and minimize the bleeding of cash, get back to a break even point before they can fully make a push again.

    BlackBerry is trying to focus on their strong sides where it has more of an advantage to make money that it can use to keep the cash flow in and out as even as it can or try to make a small profit before they can re diversify and push on a consumer market again. to do so now and not yield a good outcome leads to more negative press like we have seen in the past 8 months or so.

    what Chen is doing makes total sense and this is the way things should have been done when thorsten was in charge, keep things low key focus on the strong side while building up BB10 before it could make the push. Instead he over hyped and couldn't keep up to expectations which forced people to say BlackBerry's last failed attempt to stay relevant means the death of BlackBerry, which frankly is a little premature to say but it was beign said none the less
    02-28-14 02:41 PM

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