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BlackBerry to dial back handset launches

CEO Chen favours profitability focus as smartphone pioneer enters second phase of turnaround plan

Chen: BlackBerry has survived; now we have to start looking at growth.
Chen: BlackBerry has survived; now we have to start looking at growth.

Canadian smartphone maker, BlackBerry, will focus on margins and curtail the number of devices it launches, CEO John Chen said, as the firm enters the second phase of a two-year turnaround programme.

Chen was appointed in November 2013, after BlackBerry abandoned plans to sell itself in the wake of tumbling share prices and meagre smartphone market share. After cutting costs and selling off property in its hometown of Waterloo, Ontario, to raise cash, Chen believes the worst is behind BlackBerry.

"We will survive as a company and now I am rather confident," Reuters quoted him as saying. "We're managing the supply chain, we are managing inventories, we are managing cash, and we have expenses now at a number that is very manageable. BlackBerry has survived; now we have to start looking at growth."

Chen plans to launch only those devices that are most competitive, including one innovative device and upgraded versions of other popular models, such as the recently launched Passport and Z3 handsets.

"I'm not going to build a general purpose device, simply because it is a 5-inch touchscreen," he said. "The Chinese can build one for 75 bucks; I can't get enough parts together for 75 bucks."

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Chen’s strategy has yet to lead to concrete recovery. A Reuters poll shows 25 of 37 analysts following BlackBerry have a “hold” rating for its stock. Only one recommends “buy” and the rest say “sell”.

But some commentators suggest that talk has faded of the smartphone pioneer being consigned to obscurity.

"John Chen has succeeded in changing the conversation about BlackBerry, and that is probably true both internally as well as externally," said IDC technology analyst John Jackson.

Despite Chen’s progress, however, others doubt the long-term ability of BlackBerry to generate interest in its products and service.

"Overall we think John is doing a solid job, but our concern continues to be: how will BlackBerry drive demand for its product," said Brian Colello, an analyst at Morningstar. "The demand side of the equation is still a concern, both around selling millions of devices each year and converting enterprise software users into paying buyers in a very competitive market."

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