BlackBerry CEO John Chen continues to drive the device maker’s turnaround as he nears his two year anniversary at the helm.
Since taking over in November 2013, Chen has introduced cost-cutting measures while improving profitability. Yet investors still aren’t convinced the progress is sustainable, with shares down 30% this year.
Amid growing competition in the consumer market from Apple (NASDAQ:AAPL) and various Android-makers (NASDAQ:GOOGL), BlackBerry is shifting its focus to the world of enterprise.
Businesses, governments and hospitals will need to use its devices because of the superior security, the company claims.
FOXBusiness.com asked John Chen about the next stages of BlackBerry’s turnaround strategy and his vision for its viable future.
John Chen, Executive Chairman and CEO, BlackBerry
1. Since you started at BlackBerry in November 2013, your priority has been cutting costs. Now how are you going to grow the top line and what is the next phase of the BlackBerry turnaround?
I laid out a clear plan for our turnaround when I joined BlackBerry in November 2013, and I’m pleased to say that we are executing very well against it: achieve positive free cash flow; stabilize revenue; and then turn our efforts toward growth. We’ve achieved positive free cash flow, and at this stage in our turnaround, are focused on stabilizing revenues. Software and technology licensing is key to this effort, and we are making great progress in these areas.
We continue to lead the industry in areas that are part of BlackBerry’s DNA – including enterprise mobility and security. And an important part of our strategy to extend our leadership is to make important investments in these core areas of our business – both organically and through acquisitions. Over the past year, we’ve made organic investments of well over $100M in our security efforts. And the acquisitions we’ve made are focused on security, privacy and the Internet of Things, and will help to expand our cross-platform software and services business.
We recently announced plans to acquire AtHoc, which extends our reach in mass communication and collaboration and will be beneficial as we expand to connect and secure a range of endpoints. Like our acquisitions of WatchDox, Movirtu and Secusmart, AtHoc will further strengthen our security capabilities, which are unmatched by our competitors. And customers are taking notice.
2. BlackBerry stock is down nearly 30% this year. What are investors missing about BlackBerry?
We’ve made great progress and are now in a healthy financial position but there is, of course, more work to be done. We are at the point now where we’re focused on stabilizing revenue with sustained profitability. We’re concentrating on growth of our core software business and licensing, and have invested heavily in our strength around security with organic investments over the past year.
3. A core strength for BlackBerry is security. Why is BlackBerry the trusted device at the White House and how will you continue to ensure the government and businesses that BlackBerry is the most secure?
Security and privacy continues to be at the forefront of everything we do – it is part of our DNA and our capabilities are unmatched. Global leaders, all of the G7 and 16 of the G20 governments trust us with their mobile communications. Our security platform is proven but we are continuing to innovate to keep data secure and information private. BlackBerry today secures communications end-to-end, from voice, messaging, data and files, and we have our sights set on securing more endpoints that make up the Internet of Things.
4. It seems that BlackBerry is increasing its focus on enterprise right now. Is the consumer business still a priority?
We are focusing on what we do best, and that is security, privacy and enterprise mobility management. One challenge when I took this role was bridging the approach to both the enterprise and consumer markets. We recognize that there are consumers who are dedicated to BlackBerry and have always appreciated the productivity and security that our devices provide. For these users, and those enterprise customers who require the stringent security of our end-to-end offering, we are taking steps to make our handset business profitable.
5. Is it possible that BlackBerry would cease its handset business to focus on software?
Hardware continues to be a valuable part of BlackBerry’s end-to-end platform. That said, there is an incredible opportunity for BlackBerry to capture a greater share of enterprise revenues and service those customers who depend on the enterprise-grade mobility solutions that we provide. We have shifted some resources internally to focus on security and software. And, we will continue to be the choice for individuals who want to get the most out of their smartphones to keep their information protected and maximize their productivity, communication and collaboration.
6. You recently acquired AtHoc and said you are making strategic investments…What other investments are you looking for and can investors expect another acquisition?
BlackBerry’s acquisitions have reflected the strategic growth areas we identified to capitalize on our unique assets and capabilities. We continue to make investments in companies that will help us expand in security, privacy and the Internet of Things. The AtHoc acquisition provides an impressive customer base that aligns with our commitment to serving governments and enterprises in highly regulated industries. Overall, our acquisitions and partnerships allow us to grow, enhance our enterprise portfolio and better serve customers.
7. Could BlackBerry be acquired or would you consider a strategic partner?
BlackBerry is financially stable and on track to meet the aggressive business goals we’ve set for the company. We continue to take the necessary steps to reach our goals, while always looking for opportunities to invest in partnerships and technologies that will help drive our business forward.