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BlackBerry CEO says he may exit the handset business if the division isn't profitable


News by Andrew Kameka on Thursday April 10, 2014.

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BlackBerry CEO John Chen says he's not opposed to completely exiting the smartphone business if his company doesn't find a way to stop losing money. In an interview with Reuters, Chen plainly stated:

"If I cannot make money on handsets, I will not be in the handset business...You have to live short term. Maybe the prior management had the luxury to bet the world would come to it. I don't have the luxury at all. I'm losing money and burning cash."

Chen added that BlackBerry could make money on shipping 10 million smartphones per year, but that's a tall order given recent history of high unsold inventory of its BlackBerry 10 smartphones. In the most recent quarter, BlackBerry shipped less than 2 million. Add in a complicated relationship with T-Mobile, fading interest from consumers, and the rise of competitors in BlackBerry's bread-and-butter enterprise segment, and Chen faces serious challenges to reach his goal of profitability.

It might sound strange that BlackBerry is facing the possibility of exiting the handset business considering it so dominated the smartphone market just a few years ago, but hard times may necessitate harder choices if Chen's turnaround plan proves unsuccessful. BlackBerry has partnered with Foxconn to meet its manufacturing needs at a lower price. The struggling manufacturer has also prioritized key markets like Indonesia and decided to continue selling its older BB7 phones as long as the market demands.

Should that strategy prove successful, Chen will have no reason to consider pulling the plug on BlackBerry smartphones. Otherwise, BlackBerry will shift to only focusing on its more successful services efforts that handles BBM and device management for businesses and governments.

source: Reuters

 
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Andrew Kameka
Andrew is based in Miami, Florida.

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