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article imageOp-Ed: BlackBerry turns a profit, now what?

By Daniel Edwards     Jun 25, 2014 in Technology
BlackBerry's first quarter $23 million profit appears to be a sign that the corporate restructuring is working, but with such a far way to go to regain relevance it appears that BlackBerry still has a long road ahead.
As a child — and due to my lack of good judgment — I would engage in bike races with the neighbourhood kids. These races were quite brutal with kids riding as fast as possible and cutting each other off in order to get an edge. Needless to say I still have the scars as a reminder of my youthful folly. Thank goodness my mother worked at the hospital and told me if ever get cut I should get a gauze or paper towel and put pressure on the wound. It sounded strange to a 7-year-old how pressure could stop the bleeding but sure enough it worked. For BlackBerry it would appear that somehow John Chen has become the corporate gauze needed to stop the billions of dollars that have drifted away over the past few years. During the company’s recent quarterly report BlackBerry beat expectations by posting a relatively modest yet unexpected $23 million first quarter profit.
Coming from a company which once had a market cap of $80 billion and a monopoly on what cellphone we had in our pockets, a $23 million quarter would be grounds for an impromptu board meeting with some members leaving with only the content from their desk. Unfortunately for the Waterloo-based company, all the quarreling and employment termination has already occurred from the top down. Now on its third CEO, BlackBerry is in a different place then it was six years ago when its stock topped $144. Thankfully for employees and investors, the company is also in a different place then it was just last year when it posted a loss of $4.4 billion.
The unexpected news of a profit, combined with the release of BlackBerry’s Samsung Galaxy Note competitor the Blackberry Passport, sent the stock up 10 percent. Despite the positive results there is still some apprehension among analyst as it is still too soon to tell if BlackBerry’s slide has ended.
Even with the industry pessimism, BlackBerry is making a comeback. Probably not returning to the level it was when it began to decline in 2009, but that is no longer BlackBerry’s vision under the helm of John Chen.
“We’re going back to our enterprise roots. I don’t really want to comment on past management decisions, but we cast our net a little too broad. At the same time, we haven’t really added value to the enterprise space.” said Chen during a conference earlier this year. BlackBerry is looking to turn back the clock to a time when it focused on developing software and hardware which made the brand a staple among office spaces around the world.
The enterprise market has the capital to reignite the company and the demand for BlackBerry products can re-emerge if they can make the necessary changes to its product line.
BlackBerry’s touch based-devices which replaced the brand recognizable keyboard and touchpad were released a few years too late to gain ground against Apple and Android products. The most important feature in today’s Smartphone's are access to a vast app store which BlackBerry never truly developed while Apple and Google’s app stores continue to grow. Maybe these are the past management mistakes that Chen refused to talk about but after only eight months in his new position, BlackBerry is already rectifying its past mistakes. Instead of trying to be the iPhone or Android killer that Blackberry released with it first wave of devices under previous CEO Thorsten Heins, Chen is pushing to make BlackBerry simply BlackBerry once again.
Similar to how Harley Davidson motorcycles are not in competition with Honda Civic, BlackBerry is looking to go back to where it first found success in its niche market. For users who want a secure device with a great typing experience, BlackBerry is looking to fill that segment. BlackBerry has finally realized that its app market is inadequate but still a necessity for buyers in this 2014 app crazed world so BlackBerry has partnered with Internet retailer Amazon to offer Amazon’s app store on upcoming BlackBerry devices. As Amazon releases its first Smartphone, the Amazon Fire phone, there is hope that the $150 billion giant will invest in creating an expansive app store which will only benefit BlackBerry users going forward.
BlackBerry’s recovery will not be an overnight transformation, but after news of profit for the company it would appear that the pressure applied by Chen has stopped the bleeding. Turning back to the company’s root is admirable but will it work is the big question. The story of new Coke comes to mind when people think of BlackBerry. New Coke did not work because it was not better then the Coke that millions of people enjoyed. Fortunately for Coke, the employees were not stubborn and went back to the classic taste. BlackBerry tried “New BlackBerry” which did not work out as planned, but maybe a few revisions to the original plan will be enough to push the company in the right direction. When asked why he was the right guy for the job Chen replied “I am the only one they could find. The kind stupid enough to say "yeah." For a company in need of a band-aid it looks like they chose the right one.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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