Blackberry (BBRY) CEO John Chen spoke with Bloomberg’s Brad Stone at the Mobile World Congress in Barcelona. Chen discussed the company’s new Leap smartphone and business strategy.
In describing his first year, Chen said: “I have always said that the beginning year it’s going to focus on financial well-being. And we did that. We’re at least generating a little bit of cash. Makes a very, very little small profit. But that’s a big change from a couple years ago. Now…we’re delivering phones; we’re delivering software. We’re stepping up in our investment in encryption, and security, and privacy. And we’re releasing even more phones. So we’re getting to the point that we’re going to stabilize our revenue.”
Chen went on to say: “I’m determined to make software as a business. This is a little bit different from the past. And I also want to make sure that everything is agnostic. Because if you look at a BlackBerry base, it’s niched, it’s limited. And I wanted to be able to serve the entire spectrum. All 100% of the market.”
BRAD STONE: I am here with John Chen, the CEO of BlackBerry.
John, you introduced a phone this morning, the Leap. This does not have the iconic BlackBerry keyboard; it’s the touchscreen, $275. Tell us about it. Who’s it for?
JOHN CHEN: It’s pretty nice. It is for a seminar (ph) market; call it kind of like the entry enterprise levels. So they wanted a, you know, the young people like more touchscreen base. So we thought we’d give them a phone.
STONE: In developing countries to start or?
CHEN: No, even when enterprises, when we talk to enterprises, kind of the high end or mid- and high-end professionals, they love the keyboards. They grew up with the keyboards. And the other aspect, the other kind of the entry level people, they love a – a lot of them like to have a touchscreen. So they’ve been asking for one and so we did one for them.
STONE: Yeah. Now, you had some success, got a lot of attention recently with the BlackBerry Passport, which does have the keyboard. How strong is that business right now?
CHEN: It’s doing pretty good. I mean it’s been a well-received, it will do even better I think because we just got carried in a store by AT&T. And Vodafone is carrying it. And I think you see start rolling out from distribution. But even on just the online and limited distributorship, we’ve been doing pretty good.
STONE: So you guys have talked a lot here at the show about software and bringing BlackBerry access and apps to other platforms, Samsung phones, Android, IOS. Tell us what that means and what you guys have that maybe other app makers, other platforms don’t.
CHEN: So the company has been around with 30 years. We’ve done a lot of thing about mobile computing. Security, encryption, privacy, you know, cyber ware and all that are all good stuff, I mean that we do. Lots of patents supporting it like 45,000 patents. We think it’s time to be able to put it on other devices to expand our business.
So I’m determined to make software as a business. This is a little bit different from the past. And I also want to make sure that everything is agnostic. Because if you look at a BlackBerry base, it’s niched, it’s limited. And I wanted to be able to serve the entire spectrum. All 100% of the market (inaudible).
So we were fortunate to have a good partner in Samsung. Announced a relationship with them in November of last year. So they are our server, able to manage the Knox advice. Just couple days ago where they announced the S6, we able to add a couple of security software application onto it. So it is a very meaningful thing for us. I think the market is going to like it. It’s going to be broad.
STONE: So you are now 15 months into your tenure, into a BlackBerry turnaround attempt. What surprised you so far?
CHEN: Been doing well. So you know I have always said that the beginning year it’s going to focus on financial well-being. And we did that. We’re at least generating a little of cash. Makes a very, very little small profit. But that’s a big change from a couple years ago.
Now we have a roadmap we’re executing. We’re delivering phones; we’re delivering software, like we talked about. We’re stepping up in our investment in encryption, and security, and privacy. And we’re releasing even more phones. So we’re getting to the point that we’re going to stabilize our revenue.
STONE: How’s morale in Waterloo?
CHEN: It’s getting better. It’s getting better. People are they’re busy doing things. So every time people are busy, people are happier.
STONE: How disruptive have the Chinese smartphone makers been, Xiaomi and Micromax in your view in the smartphone market?
CHEN: Well, it’s disruptive for the low end. And here’s the interesting thing. Just like the PC business, the server business and everything else like a tablet. When the low end start burrowing into the mid-range, mid-range start pushing into the top end, you know, every one of us have to innovate more stuff and to add more features and functionalities. So the point is, it’s been disruptive, yet to be seen. It doesn’t get into my space yet.
STONE: OK, John Chen of BlackBerry, thank you very much.
Video for viewing here.
Bloomberg Television
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