We have been hearing about how John Chen plans to clean up BlackBerry’s business model. Now CIBC World Markets analyst Todd Coupland sat down with BlackBerry’s CFO, James Yersh, to discuss the details. According to the Financial Post, Yersh has a goal to bring operating expenses well below $500 million a quarter target to be cash positive by the end of Fiscal 2015.
One of the interesting points brought up by Yersh was a big anticipated reduction in BlackBerry’s cost of goods sold due to lower fixed royalty payments in 2015. Mainly BlackBerry has some fixed contracts for patent royalties that expire this November and total about $800 million. Yersh expects them to be zero next year along with a large reduction in the variable royalties BlackBerry pays which total out $200 million due to a lower number of devices selling. Yersh also has plans to turn BlackBerry’s patent portfolio into a money maker so BlackBerry is taking more than they spend on patents.
Not that big of a deal for consumers but it shows just some of the steps BlackBerry is taking in 2014 to lower their costs while John Chen refocuses the company. Kudos to RD for sending this one in!