- US Fed tapers starts, Ben Bernanke to slash bond purchases by $10 bn, emerging markets on noticeGreece, BlackBerry Limited 'cautious' bets for Fairfax's Prem WatsaEmerging market growth expands in November, Indian private sector contractsBlackBerry posts $4.4 bn loss; inks handset deal with Foxconn
and a slew of smartphones powered by Google Inc's (GOOG.O) Android operating system.
As of Thursday's close, the stock had fallen 47 percent this year. It was last trading up 14 percent on Nasdaq at $7.13.
"The most immediate challenge for the company is how to transition the devices operations to a more profitable business model," said Chen, who is credited with turning around Sybase, a database and mobile software company, before it was sold to German software company SAP AG in 2010.
Chen has said he is counting on strong growth in BlackBerry's service business, which manages smartphone traffic on the internal networks of corporate and government clients.
"Just jettisoning all the stuff and driving on with the part of the business that makes money makes a heck of a lot of sense to me and that is very clearly where Chen is going," said Ross Healy, a portfolio manager at Macnicol & Associates who owns a small number of BlackBerry shares.
Carolina Milanesi, an analyst at Kantar Comtech, said the deal is a good move for Foxconn, the world's largest electronic parts manufacturer and a major partner of Apple Inc.
"This might be the first step for them to try and diversify, and experiment with putting their brand on the products they make," she said.
DEVICES ARE A CHALLENGE
In his first presentation to analysts after the release of BlackBerry's results, Chen struck an upbeat tone tempered with a heavy dose of realism. The mix may have helped soothe nervous investors who had sharply lowered their expectations for BlackBerry after a string of disappointing news.
"It's clear that he's not the old guard, he's not there trying to do what Lazaridis and Thorsten were up to. He's actually been taking some concrete steps," said Mark McKechnie, an analyst at Evercore Partners, referring to BlackBerry's founder Mike Lazaridis and Thorsten Heins, Chen's predecessor.
Chen moved quickly to stamp his authority on BlackBerry, hiring several former colleagues from his time at Sybase and SAP for senior roles in corporate strategy, marketing, and enterprise strategy, a key unit in the stripped-back company.
BlackBerry sold about 4.3 million handsets in the third quarter,