BlackBerry May Soon Stop Making Phones If Company Continues Loss
By Vittorio Hernandez | April 11, 2014 8:36 AM EST
Canadian phonemaker BlackBerry is finally making some sense under new CEO John Chen. After making several failed attempts to regain its lost glory of being the top mobile phone manufacturer that resulted in $1 billion losses under its old CEO, BlackBerry is now seriously considering exiting the phone manufacturing business if it continues to suffer from further financial losses.
The financial hemorrhage has been going the past few years with the tech firm posting a $423 million loss in March. BlackBerry also announced recently that it would no longer extend its licensing partnership with T-Mobile.
After taking over as CEO in late 2013, Mr Chen set a new direction for the embattled company that had reduced its workforce drastically and sold properties by telling Reuters that the firm would not be producing handsets anymore if it would not make money.
He estimated 10 million units as benchmark, but its shipment of only 2 million units in the last quarter is an indication that given this trend, BlackBerry would be short by 2 million of the 10 million standard.
Mr Chen said BlackBerry would concentrate on providing secure communications for health, financial and legal services. He disclosed, "We are 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."
Despite the unpopularity of BlackBerry smartphones compared to those made by Samsung and Apple, the company's BlackBerry messaging app is widely used because of its security feature that when it released free apps for phones that run on iOS and Android OS, millions registered to get the free app.
The BlackBerry CEO stressed that the company is not only interested in managing devices it manufactured but managing all devices to meet its goal of becoming a major player in the machine-to-machine sphere.
However, The Register reported that Mr Chen has made a U-turn on his statement and blogged, "I want to assure you that I have no intention of selling of or abandoning this business any time soon."
With the company's several attempts in the past to regain its old crown by releasing new models, many tech observers think that BlackBerry is refusing to see the handwriting on the wall that its days as king of the mobile phone business are over, and the firm would rather wait for the last nail to be driven on its coffin.
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