Canadian phonemaker BlackBerry (NASDAQ:BBRY) has been passing through a long standing storm. Its annual earnings showed depressing figures with the company continuously losing its consumers. The spectacular failure of the much-hyped Z10 dealt another huge blow. Cutbacks and lay-offs had become part of the norm for the once mighty brand. Recovery, it seemed, was impossible. But against all odds, BlackBerry plans to triumph yet. The company decided to change its strategy as it appointed John S. Chen as the new CEO and executive chairman of the company in an attempt to bring back its former glory.
The Company’s New Direction
John Chen has some innovative ideas to rejuvenate BlackBerry in a new form and for now, it seems his unique thoughts will help the company swim across these turbulent times. His first focus was to customer demands – in a nod to the ideology "The customer is always right." In a press conference, Chen assured the buyers better products that would suit their demands, saying:
- Warning! GuruFocus has detected 1 Warning Sign with BBRY. Click here to check it out.
- BBRY 15-Year Financial Data
- The intrinsic value of BBRY
- Peter Lynch Chart of BBRY
“In my first 90 days on the job, I consistently heard from our ardent BlackBerry customers that the hard buttons and track pad are essential part of the BlackBerry QWERTY experience,” he said, “I want these customer to know that we heard them.”
The new Q20 which will be manufactured by the company is set to meet all these requirements. It will include a larger battery than current models and will bring back the discarded features with "Menu," "Back," "Send" and "End" buttons, as well as a better software. Chen also plans to revolutionize the BlackBerry Messenger (BBM) and rumors claim that the messaging software may soon be modified and launched personal computers too. BBM is already available on Apple (NASDAQ:AAPL) iOS and Google (NASDAQ:GOOG) Android.
However, the man’s main aim is not phones actually. In a highly unorthodox move, the company plans to shift its focus to core industrial business and tailor-made server software. The mobile giant has already introduced new software which enables corporations to supervise and control the BlackBerry devices, as well as, other smartphones that their employees use. Mr. Chen has a target to deal with corporate world, government offices, news paper and hospitals to enhance the business.
The new direction will assure BlackBerry of the edge it had formerly enjoyed. The smartphone market is too competitive to allow the traditional device to make headway, while still maintaining features that loyalists refuse to let go of. The Z10’s failure proved that. Its touchscreen, although a standard for smart phones, was too foreign for BlackBerry users to be satisfied with.
A move to the software side, however, will be undisputed territory. The fact that this decision is working can be seen from BlackBerry’s latest achievement. In an unprecedented move, the U S Department of Defense (DoD) granted BlackBerry 10 a Full Operational Capability (FOC) certificate from Defense Information System Agency (DISA). It is the only mobile device which is benefitted by this certificate so far. The company hopes that the FOC will bring a change in the BlackBerry’s corporate business world as well as facilitate the growth. As per their version BlackBerry 10 will be beneficial to government employees when they realize how amazingly beneficial the software will be when it comes to security, utility and integration.
Does This Mean BlackBerry Is Abandoning Phones?
When questioned in an interview, Chen gave a statement in an interview that he does not feel any need to stay in only device business. The company’s new direction, however, does not mean that it is done with producing phones. On the other hand BlackBerry is going to launch a new low-cost touch screen phone – Z3 which will be available only in Indonesia.
The company’s priority now is the server and software side of things, until BlackBerry can return with more attractive models. The smartphone craze is not an old one, Chen claims, and there is no guarantee it will be a permanent one. It can be reasonably assumed that the Canadian Giant might return to the world of cellular phones once things start looking a little more stable.