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BlackBerry's CEO says Making Devices Profitable this Year is the Top Goal


06/23/2016


BlackBerry's CEO says Making Devices Profitable this Year is the Top Goal
Even while Blackberry closely weighs the future of its hardware operation, its chief executive said very recently that the company’s top priority this year is making its devices business profitable.
 
"The device business must be profitable, because we don't want to run a business that drags onto the bottom line. We've got to get there this year," Chief Executive of the company, John Chen, said in a gathering with investors at the company's annual meeting.
 
The unit as suffered a sustained drop in sales in recent quarters and a decision on the future of the unit would be made by September, Chen has previously said.
 
However he sees better opportunity in providing services that enable increasingly commoditized hardware to do more Chen said at the meeting with the investors on Wednesday that was attended by around 100 people.
 
"I don't personally believe handsets will be the future of any company," he said.
 
BlackBerry has worked to reposition itself as a software and service provider focused on device management for large organizations since it lost market share in the device market to rivals. Blackberry was once the smartphone market leader in the world before being displaced by Apple Inc and competitors run on Alphabet Inc's Android platform.

Powered by the growth in medical, legal, financial and automotive industries, Blackberry expects that the broader market for types of software it is producing to expand from $525 million in 2012 and below $4 billion in 2015 to $17.6 billion by 2019, the company said in its presentation to the investors.
 
However skepticism about BlackBerry's ability to deliver on its strategic pivot were expressed by some of those in attendance at the meeting.
 
"The first word that comes to mind is lackluster. Time is running out," one shareholder at the meeting who declined to give his name was quoted by the media as saying.
 
BlackBerry wants to notch positive free cash flow and it also wants to grow its software revenue by 30 percent in this fiscal year, which he estimated would be double overall market growth, said Chen while reiterating the immediate future prospects for the company.
 
The first quarter result of the company is due to be presented this week itself.
 
Armed with the reputation as a turnaround artist, Chen took up the CEO role in Blackberry in 2013. However with many investors waiting for signs the now-smaller company will be able to carve out new opportunities, the company's stock has only risen modestly since then.
 
"I appreciate the strategy," said Ken Tota, an investor in BlackBerry's biggest shareholder, Fairfax Financial Holdings Ltd. A renewed focus on security could help reinvigorate BlackBerry over the next five years and be an optimistic approach for the company, he said.
 
"It's a niche, but it's a worldwide niche," he said.
 
(Source:www.reuters.com) 


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