Blackberry Gives Glimpses Of Turnaround Strategy

Posted: Dec 20 2013, 2:31pm CST | by


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Blackberry Gives Glimpses Of Turnaround Strategy
Photo Credit: Forbes

Like others reporting news on Blackberry, usually an easy butt of jokes, I was prepared for the worst, or best if you like jokes. Naturally, I expected the company’s earnings to undershoot already bleak expectations. This proved true. Blackberry reported a $4.4 billion loss on a 56% decline in revenue to $1.6 billion for 3Q14 today as it continues to lose customers.

But Blackberry is finally beginning to address the big question: How does it propose to improve business? This question, according to reports, was on the mind of possible buyers of the Canadian smartphone maker in the last few months. Buyers got no answer and decided to acquire nothing.

This morning, Blackberry “highlighted a definite path” to a potentially sound future during the company’s earnings call, said Neeraj Monga, analyst at Veritas Investment Research. Blackberry’s focus will be on enterprise mobility and security, said John Chen, Blackberry’s CEO of 45 days. Blackberry will not necessarily sell noncore assets but will, perhaps, find partnerships to allow itself to mitigate risk and pay more attention to areas of strength.

To that end, Blackberry announced a five-year agreement with cell phone manufacturer Foxconn to ease the burden of manufacturing hardware. The company’s also aligning business units in these four categories: enterprise, messaging, QNX embedded business and devices.

Blackberry’s stock was up 15% in afternoon trading.

The company has yet to clearly articulate its turnaround strategy, but Monga is hoping for that within the next 45 days, he said.

Alan Dabbiere, chairman of mobile device management startup AirWatch, who was public about his interest in acquiring some of Blackberry, said he’s hopeful for a more vigorous partnership effort on Blackberry’s part, a “deliberate strategy” concerning what the company does and does not do. Dabbiere believes the “pivotal” Blackberry asset is QNX, an operating system for uses in cars, communications hardware and industrial goods. QNX moves Blackberry from cell phones to many markets, “billions” of devices to “trillions,” Dabbiere said.

The specter of Nortel, a Canadian telecom equipment maker which filed for bankruptcy in 2009, and only at that point sold in chunks, looms over Blackberry without a clear, new direction, said Dabbiere and a sector banker. If Blackberry wants to remain “viable,” it has about six months to solidify its plan and another couple of years to execute, Dabbiere estimated.

When asked if Blackberry had a turnaround plan, a spokesperson referred me to the company’s earnings release today.

Source: Forbes

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