Telecom & Wireless
CEO Chen to Stay on at BlackBerry: Can He Save the Sinking Ship?
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The search for a new CEO for BlackBerry Ltd. (NASDAQ: BBRY) is over. A spokesperson for the beleaguered smartphone maker told the New York Times that interim chief executive John S. Chen has promised to stay on at BlackBerry “until the company is back on solid financial footing.” The word “interim” has been dropped from his title. The problem of Blackberry’s “permanent” decline will not be solved be the decision.
Chen replaced previous chief executive Thorsten Heins in November after the latter’s attempts to turn BlackBerry around left the smartphone maker with huge losses and an uncertain future. Since taking up the reins, Chen has overseen a series of positive moves for the company — if they work. Those include removing some senior executives and setting a deal to outsource to Foxconn the design and risk that comes from building handsets He also said BlackBerry will refocus on products aimed at government and corporate users. Unfortunately, those sectors have rapidly adopted use of Apple Inc.’s (NASDAQ: AAPL) iPhone.
24/7 Wall St. asked recently whether BlackBerry makes anything that users want. Its flagship Z10, Z30 and Q30 products have little appeal, based on sales numbers. The company said revenue for the third quarter of fiscal 2014 came in at $1.2 billion, which was down 24% from the previous quarter and down 56% from the same period of fiscal 2013.
According to comScore, BlackBerry’s subscriber market share in November was 3.5%, a distant third place behind Google Inc.’s (NASDAQ: GOOG) Android and Apple, and dropping.
So far, Chen’s efforts to get Foxconn to take over the hardware design and building seems to have been a hit, judging by the reaction of investors. Shares have bounced back from a multiyear low of $5.44 back on December 10 to about $8.75, almost back at the implied buyout price set when the company was briefly for sale.
Chen has a catalog of tasks he must complete before there is any hope he can bring the handset maker to a place where it is a viable company. BlackBerry has decided to gamble on him. Either its board believes that he is the only game in town, or that he is more ingenious than the people who have run the company through its terrible implosion.
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