updated 09:51 am EDT, Thu April 10, 2014
Failure to profit could see BlackBerry exit smartphone business
BlackBerry could sell off its hardware business entirely if it fails to return to profitability in the near future, the company's CEO has suggested. In an interview with Reuters, John Chen advised the manufacturer would consider exiting the smartphone hardware market if hardware sales do not improve to a point where the company becomes profitable.
"If I cannot make money on handsets, I will not be in the handset business," said Chen, suggesting it should be possible for BlackBerry to profit from shipments of 10 million devices per year. In its most recent quarterly results, it saw 3.4 million sales to customers in the period, though its lower-than-expected revenues of $976 million gave it a net loss of $423 million.
BlackBerry CEO John Chen
A later blog post by Chen clarified his comments from the interview, claiming they were taken out of context. "I want to assure you that I have no intention of selling off or abandoning this business any time soon," writes Chen, continuing "I know you still love your BlackBerry devices. I love them too and I know they created the foundation of this company. Our focus today is on finding a way to make this business profitable."
The interview also touched on the security aspects of BlackBerry, suggesting there could be a number of small acquisitions to help the company in the wake of the NSA revelations. "We're building an engineering team on the service side that is focused on security. We will do some partnerships and we will probably, potentially do an M&A on security."
As for the financial outlook for the company, Chen believes BlackBerry will be cash-flow positive before the end of the current financial year, ending February 2015, and to become profitable in the following year.