Blackberry’s new CEO says he’s planned a three-year road to recovery for the struggling smartphone company.
Blackberry closed a challenging 2013 with a bad day on Friday. The Canadian smartphone manufacturer, which had its fare share of trials that culminated with a takeover bid gone awry and the departure of a CEO, reported a quarterly loss of $4.4 billion. But despite all of this the company’s CEO believes he can bring the company back to profitability in 2016.
“My step one was to have the company financially out of harm’s way. I can’t say I’ve done it today, but we are on a good path,” CEO John Chen said before a small gathering of analysts and the press on Friday.
Chen said that he’s confident he can put Blackberry on a path to being cash-flow neutral by 2015 and profitable by 2016. This will be done, Chen says, by growth and not through cuts. There won’t be layoffs “if [he] can avoid it.”
Chen also spoke of outside investment in Blackberry, but didn’t specify where this might come from.
During his talk with the press Chen repeatedly pointed out that Blackberry technology is trusted with enterprise around the world, up to the White House, and the agreement with Foxconn to manufacture handsets won’t change this. Chen says that this agreement does not involve any technology licensing agreements.
“The number one thing I noticed as CEO was that our handset volume was dropping and with that, our fix cost was too high. Foxconn has the ability to bring the cost down and we will provide the software,” he said. “The hardware business was losing money and was a chokehold — I’ve relieved that today.”
Investors seemed to like Chen’s confidence, as Blackberry’s stocks jumped 15.5 percent to $7.23 on the NASDAQ. While its too early to tell if this spike signals a broader trend, it does show that there is some hope left for the company.
Source: Financial Post