Executive Column: BlackBerry wants to get back on track
The Jakarta Post
Canadian cell phone maker BlackBerry, which has lost its market share in the country's phone market, has recently released a low-cost touchscreen device, the Z3 'Jakarta edition', to win back Indonesian consumers from iPhone and Android-based rivals. During a recent visit to Indonesia, BlackBerry CEO John Chen a telecommunication industry veteran and former Sybase CEO spoke to The Jakarta Post's Khoirul Amin about his strategy to turn the luck of his company around. Below are excerpts of the interview:
Question: BlackBerry has lost half of its staff with its market share falling all over the world. How will you bring the company back to life?
Answer: I came in here for a turnaround and I hope that everybody knows what we are doing is focusing on bringing new products into new markets or existing markets, bringing innovation, focusing on doing the work for increasing market share, getting the company back on track.
What I am not focusing on is failure. I think the company is in a much better position today. Has everything been fixed? No. I am still working on that, but I think we have made tremendous progress in the last six months.
I am focusing on new products, in devices, like you saw in the Z3, that are more focused on the consumer space. We [also] have a lot of products in the enterprise spaces coming out ['¦].We are looking at releasing our new enterprise offer ['¦]. We have now set up BlackBerry Messenger (BBM) for enterprises called e-BBM, starting in June this year. So, there are a lot of good things and we are doing a lot more on QNX, our better microkernel operating system. We are doing a lot of things, but the whole idea for BlackBerry in the future is we will build infrastructure that connects everything: mobile, Internet protocol [IP] addresses, everything.
BlackBerry suffered US$423 million in losses in the first three months of this year. How will you turn that situation around?
I said we are going to turn cash flow neutral or positive by the end of our fiscal year. When I came in my first quarter, we used $1.1 billion in cash. That is huge. Last quarter we used $775 million in cash. So, I said by the end of the fiscal year we will be breaking even on cash flow or making, generating cash. To me, that is the first sign of stability.
It will be from phone, server, QNX, e-BBM, there will be a lot of things. We will control costs and expenses, we will be having an arrangement with Foxconn. Then a year later, sometime in the next fiscal year, we will be profitable. That's what we said.
How do you transfer that positive energy to your subordinates so that they have a similar vision and energy?
First of all, I have made a lot of changes to the management team and we will continue to make changes to bring in more energy. But there are a lot of BlackBerry employees that have gone through a lot in the last two years and are looking for that energy. We have a lot of good people in the company. I have brought some changes in leadership, probably not because they are not good leaders but we cannot think alike and I cannot afford the time.
We do not have much time. I know that there is no time to debate it and this is the only way to turn the company around ['¦] we have to focus on execution. But I think that a lot of people in the company that have that energy.
If you look at what we have done as a company in the last four months, we were able to put [the Z3] together and launch it in a foreign country [Indonesia].
I am very pleased that we can execute it. We had a couple of issues that we had to resolve in the last four months, some are products, some of them are processes, but both our sales team and Foxconn's team overcame them. We worked through Christmas and New Year, which are important for people in the US and Canada, and we worked through the Chinese New Year, which is important for the Taiwanese and Chinese. When the world talks about negative things, let us talk about positive things.
You have just launched the Z3 in Jakarta. Why Jakarta and how important is Indonesia for your company?
It is my recognition and my statement that customers are important to us and that Jakarta has a lot of customers, Indonesia has a lot of customers. We want to make sure that they know after the last two years we have been busy fixing our problems and when we come out, we are coming out here first.
I hope that Jakartans have something that feels like pride. This is the first step of everything, it will be
In terms of Indonesia, I know this is a very big consumer market so far. It is also one of the biggest BBM markets for us. But from our revenue perspective probably not one of the top because 80 percent of our customer base is in the so-called regulated industry, such as the governments, the banks, the healthcare system and the judicial system.
How will you compete with other phones from competitors such as iPhone and Android-based phones which have become increasingly dominant in Indonesia's market?
They are very focused on consumers. We have a very strong hold in enterprise. We do compete in the consumer space, and the product we launched [the Z3] is a very competitive product, especially since our brand is really big here in Indonesia.
I hope to sell the Z3 a lot, like a million units or something. But I am actually more focused on market share. I want to increase our market share. Whatever that account is, very honestly, I have never focused on accounts and you know I always tell people the way I determine whether it will be successful is how well obviously the market receives an under $200 [phone] with our software, with our brand on it, the quality that we have and security that we have.
And secondly, does that get us to win market share from this point? We have been losing market share in the last two years, and I would like to turn that corner. If I can turn that corner, then I can say that is successful.
Do you have any plan to launch other products besides cell phones in Indonesia?
If we will do another thing, we will probably go to phablet. I think if you look at our strategy and if you look at where the market goes, there is definitely a good market for something between a phone and tablet.
I think the phablet could be early, the tablet is already late. That is not a bad thing, because you can bring new technology. But, if I have the opportunity I will go to phablet. ['¦] we will build what the market wants.
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