BlackBerry Ltd. Chief Executive John Chen last month made a surprising promise: in an internal memo, he told employees that years of layoffs and shrinking had come to an end, and that the company would be scouting for acquisitions.
It was the latest signal from Mr. Chen, who took the reins at the smartphone maker less than a year ago amid mounting losses and declining sales, that his plan to stop competing in the consumer market is showing results. After years of losing market share to Apple Inc. and Samsung Electronics Co. , BlackBerry's makeover as a provider of secure smartphone technology for the enterprise market is taking shape.
BlackBerry, once the world's dominant smartphone maker, plans to introduce a handset with a physical keyboard and square screen called the Passport on Sept. 24. Photo: Ap.
The maker of what was once the world's dominant smartphone isn't abandoning the hardware business completely—it plans to introduce a handset with a physical keyboard and square screen called the Passport on Sept. 24. But the company has outsourced the production of devices, and is largely focusing away from the consumer market with new phones that target business users.
Mr. Chen's strategy rests on a plan to generate more profits from the higher-margin mobile security business, along with other new software services. If he succeeds in this overhaul, it will be in part by taking a page from his 13 years at Sybase Inc., a once unprofitable California company that was sold in 2010 to Germany's SAP SE for $5.8 billion.
BlackBerry's shares have jumped 68% to $10.89 since Mr. Chen took over in November, but are still 87% below where they stood five years ago. The company's losses, though expected by analysts to narrow, remain substantial.
New Smartphone Will Cost $599
"That to me says, the ship's turning, but it's going to take a long while," said Robert McWhirter, head of Toronto-based Selective Asset Management Inc. Mr. McWhirter last owned BlackBerry stock about three years ago.
At Sybase, Mr. Chen pursued small but strategic acquisitions and out-delivered on earnings, say those who have worked with him. Small deals led up to a riskier bet in 2006 on text messaging with the purchase of Mobile 365, a move that helped cement his reputation as a turnaround expert.
He says he made the deal only when Sybase was profitable and had the cash. "I remember sitting down with my CFO and saying 'even if I make this bet and it's the wrong bet it will not kill the company,'" Mr. Chen recalled in a recent interview.
Mr. Chen has moved to bolster BlackBerry's offerings for the enterprise market with two small acquisitions since late July. One company offers a product that guards against eavesdropping on mobile devices, and the other helps corporations better control employee device costs.
"The acquisitions are very consistent with [what Mr. Chen did at] Sybase," and "they will always fit very tightly with the strategy," said BlackBerry Chief Operating Officer Marty Beard, one of a core group of former Sybase executives who have followed Mr. Chen to BlackBerry.
"If there is any bet to be made it will be only when BlackBerry is doing well," said Mr. Chen, who regularly works 18-hour days. Much like he did at Sybase, he spent his first months at BlackBerry visiting hundreds of customers to help him identify products with the most potential.
It was the latest signal from Mr. Chen, who took the reins at the smartphone maker less than a year ago amid mounting losses and declining sales, that his plan to stop competing in the consumer market is showing results. After years of losing market share to Apple Inc. and Samsung Electronics Co. , BlackBerry's makeover as a provider of secure smartphone technology for the enterprise market is taking shape.
BlackBerry, once the world's dominant smartphone maker, plans to introduce a handset with a physical keyboard and square screen called the Passport on Sept. 24. Photo: Ap.
The maker of what was once the world's dominant smartphone isn't abandoning the hardware business completely—it plans to introduce a handset with a physical keyboard and square screen called the Passport on Sept. 24. But the company has outsourced the production of devices, and is largely focusing away from the consumer market with new phones that target business users.
Mr. Chen's strategy rests on a plan to generate more profits from the higher-margin mobile security business, along with other new software services. If he succeeds in this overhaul, it will be in part by taking a page from his 13 years at Sybase Inc., a once unprofitable California company that was sold in 2010 to Germany's SAP SE for $5.8 billion.
BlackBerry's shares have jumped 68% to $10.89 since Mr. Chen took over in November, but are still 87% below where they stood five years ago. The company's losses, though expected by analysts to narrow, remain substantial.
New Smartphone Will Cost $599
"That to me says, the ship's turning, but it's going to take a long while," said Robert McWhirter, head of Toronto-based Selective Asset Management Inc. Mr. McWhirter last owned BlackBerry stock about three years ago.
At Sybase, Mr. Chen pursued small but strategic acquisitions and out-delivered on earnings, say those who have worked with him. Small deals led up to a riskier bet in 2006 on text messaging with the purchase of Mobile 365, a move that helped cement his reputation as a turnaround expert.
He says he made the deal only when Sybase was profitable and had the cash. "I remember sitting down with my CFO and saying 'even if I make this bet and it's the wrong bet it will not kill the company,'" Mr. Chen recalled in a recent interview.
Mr. Chen has moved to bolster BlackBerry's offerings for the enterprise market with two small acquisitions since late July. One company offers a product that guards against eavesdropping on mobile devices, and the other helps corporations better control employee device costs.
"The acquisitions are very consistent with [what Mr. Chen did at] Sybase," and "they will always fit very tightly with the strategy," said BlackBerry Chief Operating Officer Marty Beard, one of a core group of former Sybase executives who have followed Mr. Chen to BlackBerry.
"If there is any bet to be made it will be only when BlackBerry is doing well," said Mr. Chen, who regularly works 18-hour days. Much like he did at Sybase, he spent his first months at BlackBerry visiting hundreds of customers to help him identify products with the most potential.
No comments:
Post a Comment