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Fox Business Network: John Chen On BlackBerry’s Future

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Apart from highlighting the fact that BlackBerry is not giving up on the handset business, John Chen has also spoken a little on the company’s future with Fox Business Network. I am happy that John took the time to quickly address this and that Fox Business Network really asked the key crucial questions for us. So kudos to Fox Business Network!

Here is their transcript, courtesy of Fox Business Network

On whether they are looking to sell off their patents:

From time to time, but that’s not what we are going to do. I am not in the process of selling off patents, I am actually creating more patents as I go along. But I would love to share those patents…and people can license from us.

On potential growth rate in the patent business:

In the patent business, we haven’t even started a patent business, but it is something that I am looking at intensely. I think there’s an opportunity there for the company and for our shareholders. As far as the BBM business, we are growing quite well. We now have 115 million registered subscribers and we’ve announced that we are putting on a Windows platform, and so we should expect a pretty good uptick. I don’t know what the real growth rate is going to be, but the more important thing is how we monetize it. The monthly active use is roughly 85 million right now I am hoping by the end of the year we at least get close to 100 million if not more. But the registered users is going to be a lot higher.

On whether he’s done cutting:

We are almost done [cutting]. I am sorry that we had to go through that phase. It’s necessary but it’s a prudent thing we had to do. I never see how a company can turn around by keep cutting. You need to invest, you need to turn around and you need to focus on growth.

On how much more cutting he’s planning to do:

I think it’s more like 90 than 50 [percent done] … we’re almost there. It affected a lot of our loyal employees, which it’s a really bad thing. It affected some of our customer interactions, which is a terrible thing. So we are working on shoring those up and investing money back into the customer facing side of the equation. We definitely have a different attitude right now and we are focusing on where we can grow the good assets we have. I think our cost space is about where it should be at this point.

On whether there’s a potential buyer in the market for the handset business:

I don’t think this is how I think about it. Our business is going to be very concentrated in software and end to end solutions. Handset is just a point of them. We have the handset business, the server business, we have the messaging business in BBM, and the embedded business. And the whole thing actually tied to each other to provide something called machine to machine interactions. If the handset business for some reason I am unable to make profitable in hardware, but a lot of software in there that can be used as part of our system or I can license to other people…One thing about blackberry, we have 44,000 patents. I think there’s a lot of business to be had in just collaborating in the industry and licensing to others. I’d be more than open to license to anybody for that matter.

On what areas of the business he’d like to monetize better:

Our server business has been under monetized. We have 80,000 installation around the world but we aren’t making a lot of money there. Some of the serve in the past have literally been given away. I think we need to add a lot more value to it and then we need to start charging for that technology. BBM is one I think that is going to be a good as integrated into the enterprise world. I’d like to have a secure messaging system for every company using BBM. And its secure and highly reliable. And then the embedded space. We have this product called QNX which is embedded microkernals, right now we have dominant connected car market shares. But the connected car industry is just coming to age and you see us putting those into medical, financial industry, retail, machines industry, manufacturing and so far.

On making money against his competitors:

There are a number of them. I think there’s the cost part of the equation and then there’s distribution part of the equation and there’s a product part of the equation. So the cost part of the equation, you can see that we have good partnership with different supply chains like Foxconn and other supply chain partners that work with us. In the distribution part of the equation, I’m now concentrating on distribution agreements, carriers agreements around the world, that actually align with our vision. So, want to focus on the technology and the customer base and enterprise, so this is the other part, which is I’m building product where the serious people wants to use it for fast decision making in a very secure manner. And there are a number of industry, a very, very broad-based IT spending on those. And, by the way, security is a big thing already today and it’s going to be bigger and bigger going forward. You talked a little earlier with eBay and with John, and a mobile commerce is it going to be the norm, and it’s already, I mean, arguably, it’s the norm. Not only data security is important; identity security already is important and this is where we excel.

On how he is going to make money in the handset business:

There is no doubt that I have to turnaround the handset business and broaden the channel and reach in the market. There is no doubt that I have to enhance the handset in such a manner that people will want to buy it. And we’re working that as I said many different areas and one of the areas is you got to have products that people want, but an important thing is I don’t want to chase the consumer world as you pointed out. We have big competitors in the consumer world that has certain advantages especially in the application space. I want to focus on what we do well and security is a great thing we do well. Productively is a great thing – very dependable, there are a number of important people around the world government and financials and in your industry that use BlackBerry day in and day out.

On growth in the security business:

I don’t have a number broken out, but, I believe that we could build a software business – not only space for security, but security is a big part of it, that could actually cover the handset decline you’ve seen in the past.

On emerging markets:

On the emerging world, those developing markets, we’re still going to be very competitive in the consumer space. But in the developed world, where we used to be a big player, I like to focus very much on the high end.

On market share being dominated by competitors in emerging markets:

It depends on where. For example, in Indonesia, we are the market share leaders. And so depends on where. And this is why the next phone – the first phone that we collaborated with Foxconn is going to release in Jakarta first, Indonesia first, and it’s go be to fun to see how it develops…we have plans for India and Vietnam and Thailand, but a lot of those, we’re doing it with partners, whether distribution partners or partners like Foxconn.

On the reception from customers:

I am very encouraged by that. I think this one thing that we now have a plan, we are able to explain what happened to us and why we are going to be better, and now it’s a matter of execution. And every customer that I am able to see, for those who are willing to see me that is, they are very much in sync with our strategy and our vision and a lot of them have decided to wait for our products come out instead of just switching off. So I am seeing good signs there.

On whether being a Canadian company has hurt their business:

I was not here…I haven’t seen any special impact one way or another. Obviously a good impact is as a Canadian company, the Canadians are very supportive and want us to win. Like you pointed out our customer base is very loyal, including the United Sates government also wanted us to win. I think being a Canadian company has not hurt us and in some cases has helped us in the country that is very friendly to Canada.

Via Fox Business Network

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  1. Good news about licensing. Can’t wait for a BlackBerry-BlackPhone hybrid :)

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