BlackBerry’s Chen: We’ll get our talent from Silicon Valley
FORTUNE — Smartphones are a consumer business. Apple (AAPL) taught us this truth back in 2007 when it introduced the iPhone. Chief information officers are now acquiescing to it as their employees insist on bringing their own devices to work.
For the last five years, BlackBerry (BBRY) has tried to win consumers over, too. It spent money on celebrity endorsements. It ran TV commercials. Last year, the company rebranded itself to take the name of its well-known device. And it hired R&B star Alicia Keys as global creative director. (This reporter went to one of her concerts last spring and had to witness her over-scripted, non-ironic onstage embrace of her device.)
BlackBerry chief executive John Chen thinks the company got it all wrong. All that focus on the kids and their toys? It distracted BlackBerry from its enterprise roots. It’s time the company reclaimed them. Chen says he will stabilize the company and make it profitable by 2016.
In a Jan. 7 interview with Fortune, Chen mapped out future opportunities for the company centered around the BlackBerry Enterprise Server, the ultra-secure software that companies use to manage their mobile devices. He reiterated that people can now use the company’s instant-messaging product, BBM, on any device. And he highlighted the potential for BlackBerry’s QNX operating system to become the de facto software tool for helping machines talk to each other, and thus powering everything from “smart” cars — where it already has a strong foothold — to “smart” homes.
Oh, and phones? BlackBerry sells them, too. Chen suggested that his company’s handset business could make some money once partnerships like its recent five-year manufacturing deal with Foxconn bring down the cost of manufacturing. But that’s not where the growth is.
It’s a last-ditch effort to save a company that has been on the verge of collapse for nearly two years. BlackBerry lost $4.4 billion last quarter, mostly reflecting the fact that almost no one bought that snazzy new BlackBerry 10 device it debuted a year ago. (Yes, it was nearly a year ago that Fortune took readers “Inside Blackberry’s Last Stand.” And here we are again, discussing what is really the last stand. Really really.)
Despite the seeming improbability of bringing BlackBerry back from the dead, Chen has a lot of goodwill behind him. For one, investors are anxious to support any company that can disrupt the stronghold that Google and Apple have in the smartphone market, making the competitive dynamics more equitable. And a generation of smartphone users who first learned to send e-mail on the go with a BlackBerry still miss the physical keyboards. Chen has said he’ll bring them back.
But a successful turnaround will require Chen to rethink the business at every level. Already, he has replaced a number of the company’s senior managers with Silicon Valley-based tech veterans. Former SAP (SAP) executive John Sims will run the enterprise unit. Ron Louks, a veteran of both Sony Ericsson (SNE) and HTC, will head up the devices business. And as of Jan. 30, Alicia Keys is out of a job.
In December, Chen announced a corporate reorganization that untethered the company’s software services from its devices. And he’s building a sales force to make a more direct pitch to regulated industries like finance and health care, which face security measures and compliance issues that BlackBerry has long been well-equipped to address. “The reason BlackBerry hasn’t won it in the past is because there hasn’t been a sales force on it,” he said.
But now the enterprise market is growing as competitive as the consumer market. Samsung is targeting the enterprise with a new security software called Knox. Both Apple and Google (GOOG) are making inroads as well.
Chen has faith that BlackBerry will rise again. He has now dropped the “interim” from his title as CEO. But he’s not leaving Silicon Valley for Waterloo, where the company is based. “This is where we’re closer to the market and we’ll get our talent,” he said.