BlackBerry considering exiting handset business if not profitable next year

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BlackBerry CEO John Chen said Thursday, at the Code/Mobile conference, that the company would consider exiting the handset business in a year if it’s not profitable.

“I’m in the handset business because I believe there’s value added and a market that is underserved,” Chen said Thursday.

“Sometime next year we have to make our device business profitable, otherwise I have to rethink what I do there.”

Naturally, a lot of the talk revolved around the upcoming Priv, BlackBerry’s first ever Android smartphone.


“Two or three things that I need to solve for the company to do well again is I have to go cross platform, I have to solve the lack of applications, and I can’t let go of the security aspect. We wanted to bring the BlackBerry know how in security — the whole stack — to Android, recognizing that we need the apps there, and the world is about integrating now.

I’m doing what I’m doing to take advantage of what the industry has to offer without giving up the security and privacy features BlackBerry is known for.”

John Chen with Priv

Chen clarified that the Priv will actually come with a PIN, similar to every other BlackBerry smartphone:

We work with Google, but I can’t guarantee anything, maybe that’s a dumb thing for me to say, but we think we’ll be more resilient than anyone else. We inject a PIN in every chip in every phone, even the Android ones, and our security reaches the entire stack. We’ve created a patching mechanism that will address attacks a lot quicker than others to protect the customer. There are many safeguards and locks in place, but it’s not foolproof 100%, nobody can say that.”

When asked if he was stating that BlackBerry will provide the securest Android smartphone, he acknowledged the Blackphone as a viable security device and competition in this space:

“We’re probably the same level as Samsung’s Knox. The only other commercial phone that can say they have the same or better than us is maybe the BlackPhone.”

Asked about supporting two operating systems — Android and BlackBerry 10 — Chen didn’t really give a clear answer if we’ll see more BB10 devices or not.

“We have two new releases of BB10 coming out to support government and high-security space.”

” Well that’s going to be dictated by business choices.”

While Chen wouldn’t commit to saying that we’ll never see another BB10 device again, he noted that the market for BB10 devices has been squarely in the high-security business, such as governments and hospitals. BlackBerry will continue to support those customers with software updates, but since they don’t upgrade their devices very often, the impetus to come out with new hardware often is low.

Chen says he’s working directly with carriers to sell the Priv and that we’ll definitely see it in carrier stores when it launches. He notes that the carriers are excited to offer the device, since their staff already knows Android and can help customers with it.

During the Q&A Chen stated that his goal for the hardware division is 5 million units per year, which will be necessary to make the business profitable.

In its most recent financial quarter, BlackBerry sold just 800,000 phones, so a lot of that volume is expected to come from the BlackBerry Priv.

It’s clear that a lot is riding on the Priv.


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