BlackBerry may consider exiting handset biz, eyes investments

Apr 11 2014, 12:06 IST
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The chief executive said small acquisitions to strengthen BlackBerry's network security offerings were also possible. (Reuters) The chief executive said small acquisitions to strengthen BlackBerry's network security offerings were also possible. (Reuters)
SummaryCEO Chen says the company is looking to invest in healthcare and financial services

BlackBerry would consider exiting its handset business if it remains unprofitable, its chief executive officer said, as the technology company looks to expand its corporate reach with investments, acquisitions and partnerships.

“If I cannot make money on handsets, I will not be in the handset business,” John Chen said in an interview, adding that the time frame for such a decision was short. He would not be more specific, but said it should be possible to make money off shipments of as few as 10 million a year.

At its peak, BlackBerry shipped 52.3 million devices in fiscal 2011, while it recorded revenue on less than 2 million last quarter.

Chen, who took the helm of the struggling company in November, said BlackBerry was also looking to invest in or team up with other companies in regulated industries such as healthcare, and financial and legal services, all of which require highly secure communications.

The chief executive said small acquisitions to strengthen BlackBerry's network security offerings were also possible.

“We are building an engineering team on the service side that is focused on security. We are building an engineering team on the device side that is focused on security. We will do some partnerships and we will probably, potentially do an M&A on security.”

He said security had become more important to businesses and government since the revelations about US surveillance made by former National Security Agency contractor Edward Snowden.

In a wide-ranging interview in New York, Chen acknowledged past management mistakes and said he had a long-term strategy to complement the short-term goals of staying afloat and stemming customer defections.

“You have to live short term. Maybe the prior management had the luxury to bet the world would come to it. I don't have the luxury at all. I'm losing money and burning cash.”

In March, the embattled smartphone maker reported a quarterly net loss of $423 million and a 64% drop in its revenues, underscoring the magnitude of the challenge Chen faces in turning around the company.

Chen said BlackBerry remained on track to be cash-flow positive by the end of the current fiscal year, which runs to the end of February 2015, and to return to profit some time in the fiscal year after that.

Chen said his long-term plans for BlackBerry included competing in the burgeoning business of connecting all manner of devices, from kitchen appliances to automotive consoles to smartphones. Chen said he was not sure

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