1. Grafic111's Avatar
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    John Chen: the BlackBerry turnround
    David Crow

    One of the first things John Chen did after becoming chief executive of BlackBerry last year was confiscate his wife?s Samsung Galaxy.
    ?There were a couple of parties we went to and, when my wife brought out the Samsung, everyone kind of looked at me funny,? he says. ?So eventually I said she needed to use a BlackBerry. ?No, I like my Samsung?, she said, and I told her she was embarrassing me.?
    Does she still use it in secret? ?That, I wouldn?t know,? he quips. ?There might be a lot of secrets I don?t know.?
    Initially, she found the new phone difficult to master, an experience that Mr Chen says is shared by many using a BlackBerry for the first time. ?It is harder in the beginning, but once you get it, it?s actually quite powerful. It makes other devices look a little toyish.?
    He likens the experience to driving his friend?s Lamborghini. ?There?s a special sequence but, once you know where all the things are, it blows your mind. Still, because of that, I would never buy a Lamborghini. We too need to make sure the learning curve is not so steep.?
    It is just one of many challenges facing Mr Chen, 59, who came out of semi-retirement a year ago to try to turn BlackBerry round. When we meet for tea in the Mandarin Oriental Hotel in New York, he seems surprisingly relaxed about the scale of the task.
    It is a beautiful late autumn afternoon, the sun streaming in through the windows of the lobby lounge on the hotel?s 35th floor. Mr Chen looks like many of the other executives enjoying the Central Park views, dressed in a sober suit with a striped tie and the addition of a BlackBerry lapel pin. Not for him the jeans and T-shirts loved by Apple bosses.
    His quiet confidence is not entirely without foundation. The company, which was facing an existential crisis when he joined in November 2013, is now on a surer footing after he took an axe to costs and dramatically slowed the rate at which the group burns through cash. The group?s shares have risen by about half over the past 12 months.
    Yet BlackBerry is a shadow of its former self. At its peak in 2008, it accounted for one in every five smartphone sales and had a market value of $80bn, much higher than the $5.6bn it is today. Now its share of the global smartphone market is less than 1 per cent.
    He is clear about what went wrong. BlackBerry abandoned its enterprise customers and ?wandered off to try and get the consumer?, a disastrous strategy given its failure to focus on apps.
    By his own admission, saving the company was the easy part, even if it involved unpopular choices such as cutting 4,500 jobs. ?It was do or die. I guess that while the decisions were a little profound at times, they needed to be made, and quickly,? he says. Returning the company to growth will be much more difficult. ?The hardest part is yet to come.?
    The job cuts have damaged the company?s self-esteem. ?I can?t say morale is in top shape. I don?t believe it is. But it?s certainly not as bad as most people think,? he says, adding that many in Waterloo, the Canadian town where BlackBerry is based, support his efforts.
    Mr Chen has form when it comes to turnrounds. He took control of Sybase, the enterprise software group in 1997, when its shares were trading at record lows and most in the industry thought it would not survive. He rebuilt the group with a strong focus on mobiles and tablets, and sold it to SAP in 2010 for $5.8bn, more than six times its value at the start of his tenure.
    Yet reviving BlackBerry will be tougher, and Mr Chen admits to ?oscillating? when deciding whether or not to take the job. ?It was not an easy decision. It was well publicised that the company was broken, and I knew it would take up a lot of my time. It?s not that I mind the work per se: I just wanted to make sure that I knew enough. It was very close.?
    The award of about $85m of restricted stock when he joined ? a huge sum for a company of BlackBerry?s size ? must have helped seal the deal, but he bats aside the question of whether it was too generous. ?What is big or small? That?s a question for the board. Remember when I came in we were teetering, we weren?t sure if we were going to make it or not.?
    He says it takes a certain temperament to assume the top job at a failing company. ?When you do turnrounds, you have to have this very compartmentalised view of life. You do all you can to make a difference, but you cannot let everything drag you down.?
    In an attempt to win back the companies who have abandoned BlackBerry, Mr Chen hopes to build on the device?s strengths ? a good keyboard and strong security ? with some new innovations. In September, he bought Movirtu, a UK group which makes software that allows several different numbers to be used on the same Sim card, and acquired a company that encrypts voice calls.
    ?People still love the keyboard and security is very important. I have lunches with big fund managers and they all back BlackBerry because they don?t want a breach or a data leak. Now we need to make our devices a bit more pleasing to those people.?
    The square design of the recently-released BlackBerry Passport is part of this drive to reawaken the dormant ?CrackBerry? addiction that once gripped the business community: the unusually large screen is aimed at spreadsheet users.
    Asked whether he can return BlackBerry to its former glory, I expect Mr Chen to say that the best the group can hope for is to become a small but profitable enterprise player, and that any attempt to take on Apple and Samsung would be hubristic folly.
    Yet he turns out to be more bullish than that. ?I don?t have a perfect crystal ball but there?s no point coming in saying that we?re not going to dominate again. One has to be realistic, but it?s not impossible.?
    He points to Apple?s remarkable comeback after Steve Jobs returned to the company in 1997. ?Apple dominates today, but when they started out BlackBerry was definitely the dominant force. There was a changing of the guard in the industry.?
    While BlackBerry might not necessarily become a leader in handsets again, Mr Chen reels off a list of areas where it could become a leader, such as the ?connected car? and the ?internet of things?, the latter being a reference to the drive to connect everything from our toothbrushes to our toasters to the web.
    ?I hope today there is very little question of whether we?re going to survive. You ask whether we could be great again. And I say I?m looking for something to be really great in.?
    Second opinion: the former colleague
    ?John has always had an open door office, he?s a walk-around manager who would regularly show up at your desk,? says **** Alberding, a former director at Sybase, where Mr Chen used to be chief executive.
    ?He has a knack of walking into a difficult situation and finding a way of sprinkling a bit of sunshine, but he is also tough and demanding. He expects his managers to know what?s going on, and to understand their responsibilities. If they don?t, he will give them a lecture.?

    divakar likes this.
    11-10-14 03:11 AM
  2. anon1727506's Avatar
    Think he will be able to make a future for BlackBerry... if someone doesn't come in and buy it.

    But not so sure that the future will have smartphones in it. BlackBerry is still losing marketshare and becoming less and less relevant in the smartphone sector. And nothing Chen said changes that... he's admitting that BlackBerry can't compete on hardware. And the platforms reliance on Android is not a long term option, unless Google decides to be more open than where they are currently headed. Which is why Samsung and others are giving up on their - "lets use Android Apps with our own OS plans". Even rumors that Amazon will have to go full Android show the... not to hard for them, just a simple OS update.

    So either BlackBerry switches gears and start working to build the platform up (invest a lot of money attracting KEY developers and Apps - only marginally working for MS), or they make money for as long as they can with what they have. And hope that by the time they are forced to close hardware down, that either BES13, QNX Medical, Network Secure IoT or some other product will become the real bread earner for the company.

    One of the first things Chen said when coming on board is that Hardware might have to go.... think that is still on the boards (he just isn't making the mistake of being vocal about it anymore), they are just trying to get other products free from the reliance on Hardware.
    11-10-14 09:02 AM

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