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CDN Top Newsmaker: BlackBerry’s John Chen

BlackBerry CEO John Chen

In 2016 we said good bye to the BlackBerry smartphone. Waterloo, Ont.-based BlackBerry
CEO John Chen made the historic decision to exit the hardware business and leave development of future smartphones to its partners.

This decision was a sad news announcement for Canadian innovation as BlackBerry was at one time the darlings of the mobile generation.

Previously, Chen had said that if BlackBerry’s hardware business was not profitable within its current fiscal year, it would exit.

Chen said the company planned to end all internal hardware development and will outsource that function to partners allowing the company to reduce capital requirements and enhance return on invested capital.

He added that BlackBerry reached an inflection point with its strategy. While the financial foundation is strong, the company had already pivoted to software and that strategy is taking hold.

What it meant to BlackBerry smartphone supporters was that the devices would be pushed to market in a similar fashion to the DTEK50. Rather than develop the hardware for the device internally, BlackBerry chose to use a design created by TCL, the parent company of Alcatel. Also, the devices will continue to run on Android, meaning that BlackBerry is now branding phones where it neither designs the hardware or the OS being used.

Speaking of those financials. BlackBerry reported a 31.8 per cent drop in year-over-year revenue for the second quarter, with a net loss of $372 million. But aside from one-time write-downs, BlackBerry says it broke even. Chen focused on an improvement to its software and services revenue, which was $156 million for the quarter.

As for the channel, BlackBerry did hire a strong veteran channel leader in Richard McLeod from Cisco Systems. And, McLeod got to work in a hurry creating a new channel program and renewed focus on solution providers as the company’s next big go-to-market approach.