BlackBerry CEO 'clarifies' comments, says not selling devices biz

BlackBerry CEO John Chen says his recent comments were taken out of context.

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BlackBerry CEO John Chen at CES earlier this year. Roger Cheng/CNET

So...BlackBerry isn't selling its smartphone business after all.

BlackBerry CEO John Chen said in a blog post on Thursday that he is still committed to the phone business. Chen was "clarifying" comments made to Reuters on Wednesday in which he said he would consider shedding the business if it becomes unprofitable.

"I want to assure you that I have no intention of selling off or abandoning this business any time soon," Chen said.‎ "I know you still love your BlackBerry devices."

Chen is in the middle of transforming BlackBerry into a company that is more focused on its business clients, but has said he would not retreat from the consumer or handset business. His apparent comments on Wednesday sparked panic among the BlackBerry faithful, a small but loyal group of customers still clinging to their message-centric devices. The same groups also at least partly undercuts his attempts to pull off a comeback.

The CEO has been known to be candid in his interviews, offering up opinions and observations that aren't necessarily vetted by his communications team. As a result, he's made for a fascinating figure in the wireless industry, even as his company continues to struggle.

"If I cannot make money on handsets, I will not be in the handset business," he told Reuters on Wednesday.

Chen dropped by during a reporter roundtable to further clarify the position. He said that his comment was an answer to the question of what would happen if the phone business wouldn't be able to turn a profit. But he said that during the interview he stressed he was confident that he could make a profit.

"We're working hard to find ways to make money in the business," he said.

BlackBerry's team is looking at every facet of the handset business to cut costs and creating a more efficient distribution channel. The company has signed a deal with Taiwanese manufacturer Foxconn to build its phones, allowing it to reduce operating costs and bring out new products faster. While higher sales volumes would be good, there are other factors the company is looking to control.

"Everything you can think of, we are looking," he said.

BlackBerry shares fell 18 cents, or 2.3 percent, to $7.78 in recent trading.

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BlackBerry hosted a business-focus event on Thursday. Roger Cheng/CNET

BlackBerry, meanwhile, is poised to re-enter the handset business with new devices. At this year's Mobile World Congress, Chen teased the budget BlackBerry Z3 and the keyboard-rocking Q20. In an interview with CNET, he teased yet another BlackBerry device to come.

That Chen would entertain the thought of selling the handset business -- if it proves to be unprofitable -- is not unreasonable. Chen, who comes from a business software background, likely sees an opportunity with parts of its company like BlackBerry Enterprise Server or BBM messaging. And it would be the duty for any CEO to either shed or fix a business that wasn't making money.

But his comments are badly timed because BlackBerry is still placing its bets on the handset business -- even in a more limited way.

BlackBerry hosted a business-centric event on Thursday in New York, with John Sims, head of the company's enterprise unit.

"We have created an intense focus in the company on the enterprise and regulatory space, focusing on productivity, collaboration, and doing it securely," Sims said to an audience filled with business clients. "We want to be the best in class."

Updated at 8:30 am PT: To include comments directly from CEO John Chen.

About the author

Roger Cheng is the executive editor in charge of breaking news for CNET News. Prior to this, he was on the telecommunications beat and wrote for Dow Jones Newswires and The Wall Street Journal for nearly a decade. He's a devoted Trojan alum and Los Angeles Lakers fan.

 

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