Will John Chen decide to make BlackBerry a software-only company?


With its share of the global smartphone market now under .5%, BlackBerry CEO John Chen might have to make a hard decision concerning future sales of handsets. An amazing report issued by Morgan Stanley last week suggested that the company has sold only 8000 units of the BlackBerry Passport and BlackBerry Classic during this current quarter. Consider that AT&T is selling both models, that seems quite hard to believe. Morgan Stanley's James Faucette says that BlackBerry will have to hustle to sell 2 million to 3 million old-school BlackBerry Classic units in fiscal 2016.

Last quarter, BlackBerry brought in $793 million, a 33% drop year-over-year. In order to reverse this trend, BlackBerry has started offering its BlackBerry Protected, a secure IM client that eliminates "man in the middle attack" allowing the encryption keys to be generated by both phones involved in the chat. The beauty of Protected is that it allows a company to chat outside the enterprise, or with customers, and keep the communication secure on both ends. And since this is part of BES 12, it will work on BlackBerry, Apple, Android and Windows Phone handsets.

Chen says that BlackBerry could hit $500 million in revenue from software and services alone in fiscal 2016. That would be a 100% rise from the prior year. Could BlackBerry thrive as a software company? Obviously, the focus would be on secure communications. The company recently partnered with Samsung and IBM to stuff a Samsung Galaxy Tab S 10.5 with encryption software produced by Secusmart. The device, called the SecuTablet, will be a premium slate for the enterprise priced at $2380. BlackBerry purchased Secusmart last summer.

We could see BlackBerry focus on other situations where it stuffs another manufacturer's device with its encryption and security software. If you're a fan of BlackBerry's hardware, the bad news is that the clock is ticking. We might see one more effort from the company to produce another flagship device with a physical QWERTY that partially hides away inside the body of the phone. If this device doesn't sell, Chen might decide to make BlackBerry focus on software only.

source: FinancialTimes

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62 Comments

1. waddup121 unregistered

They should. Cuz: You know you don't got any of the "teen" generation anymore, which will help you boost your smartphone sales. Blackberry is more recognzied for people who have relations with business, as their phones are mostly targeted for people that do business, so they should stick with that. Blackberry Hub btw is great, they should focus on things like that and keep doing software-oreinted things in the future.

8. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

Bussiness? BB Hub? I think BB should learn to listen what the customer really want, instead of 'fighting' the customer. If you see the comment section of PhoneArena, there were true inspiration by BB-wannabe, such as Android BB phone. and BB completely putting the finger in the ear and say "enterprise, BB10, Amazon Store, Secure", and the one that the lamest is BB-advocate/paid-employee trolling the possible-bb-user with "Why don't you try", "You haven't try", "You can't comment because you don't know BB10". BB should learn that mantra is not working anymore, and instead of paying someone to keep saying broken spell, they better listen to what user want.

15. Dr.Phil

Posts: 2361; Member since: Feb 14, 2011

I have to disagree with the notion that Blackberry needs to adopt Android. Actually, from hands-on experience in using a BB10 device, it handles multitasking a lot better than Android and can do so on lower tier hardware. It's because the QNX system it's based on is quite good. There's a reason you have all of these car manufacturers adopting QNX into their systems, it just works. What is Blackberry 10 lacking? Apps of course, but users have found ways to install almost any Android app on their BB10 devices using a simple go around method. When I sit down and really look at the applications I use daily, BB10 has them all.

19. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

About car & QNX I disagree with what you said.. Car manufacture adopting QNX because QNX already have a working system in the past. BUT, it would change a lot in the very near future, as people will demand more feature such as android auto. What BB10 lacking is the speed of innovation. Blackberry couldn't speed their R&D with only supported by small BB10 device. This is a catch 22, and BB either do what microsoft do, pour money like crazy, or back down. Staying in middle of fast lane will make BB die faster.

22. meanestgenius

Posts: 22043; Member since: May 28, 2014

Android auto can't function without QNX. Neither can Apple's carplay. QNX in the auto infotainment systems keeps growing because it is the most versatile and functional. BB10 is innovating at a quicker pace than other OS's.

32. jroc74

Posts: 6023; Member since: Dec 30, 2010

"BB10 is innovating at a quicker pace than other OS's." I wouldnt go that far.....but they are doing ok for themselves.

36. meanestgenius

Posts: 22043; Member since: May 28, 2014

I would and can go that far. Here's why: The Passport was introduced at the tail end of 2014 running OS 10.3.0. Here we are now a few short months later in 2015 and not only has BlackBerry released 2 updates, but the beta for OS 10.3.2 is out. If that's not innovating at a quicker pace than others, then nothing is.

53. jroc74

Posts: 6023; Member since: Dec 30, 2010

Quick updates = innovation now? Or innovating at a quicker pace? Are there any new or extra features in the updates?

54. meanestgenius

Posts: 22043; Member since: May 28, 2014

Yes, there are new features in each update that they have introduced. If you used BB10, you would know this.

28. Mxyzptlk unregistered

Blackberry needs something to make them stand out from the masses.

61. NickolasT

Posts: 14; Member since: Mar 12, 2013

For your information, Android and especially iOS have pretty much reached End of Life. It is BB10 that is highly Innovative, Intuitive, Intelligent, Productive and Technologically far superior. It also directly downloads and installs Android Apps off App stores such as Amazon & 1Mobile for example. This is to stop the bickering about BB10 not having some key apps people wants. Android, iOS and Windows Can run on an Automobile by itself, but Car Manufacturers would never allow such a thing. They all require BlackBerry's QNX. QNX runs in the Background to ensure everything runs smooth, while Android Auto and Apple CarPlay run on top. Just ask Ford why they ditched QNX for Microsoft, the dumped Microsoft and Crawled back to QNX? Because nothing does it better than QNX.

29. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

Dr. Phil, Blackberry have lots of follower in the past. BB sell a massive amount of unit of more than 15 million unit/quarter before it fall down. It has almost 20% market share. Those BB follower/user, if they satisfied with BB, WILL/WANT to buy another BB. That's the way market work.... BB user.... if satisfied buy another BB. ... if not, try another brand.... [REPEAT] BB user.... if satisfied buy another BB. ... if not, try another brand.... [REPEAT] BB user.... if satisfied buy another BB. ... if not, try another brand.... [REPEAT] The reason BB has lost the market share from nearly 20% to almost nothing is because one by one, the BB user feel dissatisfied, and MOVE ON to other brand/platform. No mater what you said about how good BB10 device is, can't wipe the FACT that one by one, BB user were MOVING ON to other platform. There is two way to see this situation. Blackberry (and you) can be in denial, and try and try.... or, sit back, and accept the FACT, and react based on the FACT.

37. meanestgenius

Posts: 22043; Member since: May 28, 2014

What you have posted is a "formula" that any other OS can be put in. Has BlackBerry lost users? Undoubtedly. But will they continue to lose users, especially with the release of the Passport and the Classic? Doubtful. Very much so. Especially with the new slider coming out soon. March 27th, this Friday, shall tell the tale.

38. Khepera

Posts: 8; Member since: Mar 06, 2013

I totally agree

58. NickolasT

Posts: 14; Member since: Mar 12, 2013

You should listen to yourself. What are you talking about? LOL If you haven't used BB10, don't comment on it. BlackBerry can't possibly compete head on with Android and iOS ATM, so they are targeting the business user. But they haven't left out the consumer for obvious reasons. The upcoming BB10 Slider device is for Consumers & Business folk. All BB10 based smart phones are professional devices, but can also do anything a Android and iOS can do and some. Z30 is possibly one of the best full touch smart phones out to date. Won best smart phone in 2014. Passport won best for 2015. As soon as they restructure the company and start bringing in stable revenue from a combination of software and hardware, they will further dip into the consumer market, as by then they would have gained some market share, that should also help rectify its image problem.

2. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

BB only registered 8000 BB passport in Classic for Q1 2015 because they report the shipment number in Q4 2014. (they cheat/bluff) I think BB really should MOVED ON to software only company, or considering selling BOTH BB10 & Android for each phone they released, with this strategy, BB can learn if user really want BB10 or android. The longer John Chen dragging his feet on this, the bigger the damage BB got.

62. NickolasT

Posts: 14; Member since: Mar 12, 2013

Compared to BB10, Android is plain crap. That will never happen. And those 8,000 Passports/Classics were for 1 week's worth of sales in the USA. By One Carrier. And no BlackBerry will continue its hardware division, continue to release new and highly innovative BB10 smart phones. because Hardware makes up more than 50% of its Revenue. And its going to be Hardware Revenue that will help the company seek other revenue streams, Software being one of them. I advise you go out and buy yourself a BlackBerry Z30. You will quickly realize Android touting super charged specs are nothing but Gimmicks. Though I am all for hardware specs increase, that is not Innovation, its evolution.

3. Derekjeter

Posts: 1489; Member since: Oct 27, 2011

Its sad that they never wanted to evolve in to a better company. I feel sad that BB wont rise from this. I loved them as my first smart phone in the BB curve but my ultimate favorite phone BB Storm. They had a good idea with that phone it was just poorly executed. They need to go back and look in to making BB powered android like Nokia should make android flagship.

5. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

Derekjeter, I agree with you. I also wondering what keeping them to produce android flagship. They already work with samsung, google to secure android, and also with IBM through secusmart. Why they think too arrogant to admit defeat on BB10?

6. NFSHesham

Posts: 297; Member since: Feb 04, 2014

They are not arrogant.. Android simply can't get half the security of a blackberry 10 without costing you an arm and a leg Blackberry 10 is more creative and a much better overall system than iOS, Android and Windows phone It is just people are not willing to try it Blackberry should start producing cheap and nice dual Sim devices in India, Asia and MENA and do campaigns and they would sell like hot cakes

10. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

It's NOT people are not willing to try it. The EARLY ADOPTER has run away because of bad build of early BB10 The SECOND WAVE has run away because of LACK OF APPS The THIRD WAVE.... do you need to be fooled 3 times??? The thing is, BB can't keep up to fight google/apple to lure developer & also the speed of OS evolution. It's NOT people were not willing to try. It's a COMMON SENSE for people NOT to WASTE money on what they believe is already rotten/failed. and this can't be fixed easily with cheap & campaign.

51. meanestgenius

Posts: 22043; Member since: May 28, 2014

It most DEFINITELY IS that people are unwilling to try. Consumers are a fickle lot, and if they are already locked into a competing ecosystem, they are unlikely to switch. There was no "second wave" of consumers, as most were already legacy BlackBerry users that were scared off by the unfamiliarity of BlackBerry 10, so they remained with their legacy devices.. This time around, the Passport was released to keep BlackBerry users that wanted a high end BlackBerry device that was able to compete with high end Android devices and the iPhone. The Classic was then released to lure the legacy BBOS7 users to BB10, being that it has the familiar toolbelt. BlackBerry listening to its user base, as they are the ones that have asked for this device. BlackBerry isn't "fighting" with Apple or Google to lure developers. They can't afford to waste the resources. They have instead opted to focus their own, native app store on enterprise apps, and have entered into a deal with Amazon to handle the "consumer" apps. BB10 has also been evolving at a rate as fast as, if not faster, than the other OS's. They've had 3 updates since between the tail end of 2014 and now, all evolving the BlackBerry 10 OS. Again, IT IS that people are unwilling to try something new. If you've already spent 6 months or more on a chosen OS, delving deeper into its ecosystem and spending money for apps and other content, especially if you're an iOS user that cannot easily (or can't at all) transfer your purchases to a new OS, how likely are you to switch? It's common sense, you won't switch at all. BlackBerry doesn't offer anything "cheap" (I WISH their handsets cost less), and the only "campaign" that they've entered in is one geared towards enterprise, government, and regulated industries. They've also just created a new device (The BlackBerry Leap, and I hate the name) to attract young, budding entrepreneurs, which is by extension, the enterprise market. They created the device because, again, BlackBerry is listening to THEIR buying public, which demanded such a device.

4. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

That graph really hurting my eyes. It's a free fall graph... from 19% to 14% to 8% to 3% to 0.6% to 0.4%.... and someone here keep saying "enterprise, enterprise, enterprise"

9. g2a5b0e unregistered

Your EngRish is entertaining. Keep it up.

11. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

sarcasm?

13. g2a5b0e unregistered

No, not at all.

20. JaneChenLong

Posts: 374; Member since: Mar 18, 2015

Thank you

26. tech2

Posts: 3487; Member since: Oct 26, 2012

In case you didn't notice that was sarcasm too.

34. g2a5b0e unregistered

No, actually it wasn't. Don't presume to understand what I'm thinking. I completely find his writing entertaining. I meant exactly what I said.

55. tech2

Posts: 3487; Member since: Oct 26, 2012

and that's a sarcasm too, right ? :3 :P

* Some comments have been hidden, because they don't meet the discussions rules.

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