BlackBerry CEO: Our Foxconn phone will cost under $200
Foxconn has its role, says John Chen, "but we will do the next set of cool phones." He also hints at another potential keyboard smartphone for this year.
LAS VEGAS -- BlackBerry will likely have at least two smartphones hitting the market this year.
That's according to BlackBerry CEO John Chen, who spoke to the media in a roundtable at the Consumer Electronics Show here Tuesday. The company is working on athat he said will be priced under $200. He also teased another, and higher-end, smartphone that would include a traditional keyboard, which would be designed in-house.
The devices signal that BlackBerry isn't quite ready to give up on selling smartphones to consumers, although it won't repeat the flashy -- yet ultimately doomed -- attempt to take on leading smartphones such as the Apple iPhone 5 and Samsung Galaxy S4.
"We're not retreating from the consumer business," Chen said.
Still, Chen said thewill be on the enterprise, which is likely where its more traditional keyboard smartphone will come into play. In addition to devices, he wants to shore up the enterprise service and mobile device management business, build upon the momentum of the BlackBerry Messenger service, and better utilize its QNX platform.
Althoughof BlackBerry (and chairman, too), just two months on he has quietly dropped the "interim" bit, and said Tuesday he will stay with the company until it is financially and strategically sound, a milestone that he projected would be through the next 18 months. He confirmed that BlackBerry has halted its search for a new CEO indefinitely, thus providing a little stability to the embattled company.
Chen has already put his mark on the company. Shortly after taking the interim CEO title, he cleaned house at BlackBerry, eliminating several senior executives involved with the previous regime's failed attempt to turn the business around. BlackBerry also justas its "chief creative officer," as its focus shifts to big business and government clients.
Over the last few weeks, Chen hired SAP executive John Sims to run the enterprise unit, and on Monday named former Sony Ericsson andto head the devices business.
Chen also took the chance at the roundtable to dismiss the notion that BlackBerry is outsourcing its device business to Chinese manufacturer Foxconn. He called the new arrangement more of a partnership, and while Foxconn will deal with the mechanical design, BlackBerry will work on some of the hardware and will focus on the software. The phones will still carry the BlackBerry brand and be sold by its sales force.
Chen said Foxconn would be able to move faster than BlackBerry on design and manufacturing, and could bring about cost savings because Foxconn could get better terms for components. The phones would also use more standardized parts, and Foxconn would hold the inventory, eliminating one financial risk for BlackBerry.
"For emerging markets, BlackBerry will let Foxconn take a bigger role," he said. "But we will do the next set of cool phones."
Chen said he expects the company to be cash flow positive within the next four quarters and profitable by fiscal 2016.
On display during the roundtable Tuesday was the enthusiasm and wit that Chen demonstrated when building up mobile enterprise software company Sybase (which was eventually acquired by German enterprise software giant SAP). He insisted he has a plan for the next 18 months, but quipped that he wasn't sure whether he would be able to execute on all of it.
But Chen faces significant challenges. Although he remained positive about the most recent quarter, noting that the company's inventory issues have cleared up, BlackBerry posted a wider loss than expected. Its market share in the smartphone business has dwindled, and Chen's attempt to sell smartphones through enterprises could be hampered by the trend of businesses to allow their employees to bring in their own devices.
On the enterprise device side, BlackBerry faces a potentially dangerous opponent in Samsung and its enterprise service, named Knox. Samsung has plastered billboards and buses with the Knox brand, bringing the same kind of marketing heft that helped make its Galaxy S franchise a blockbuster.
Chen said he doesn't underestimate Samsung.
"If they deliver on what they say, they're a legitimate threat," he said.
The "if," of course, underscores his belief that Samsung may not be ready. Samsung's Knox was recently found to have security flaws in the software, a black eye for the Korean conglomerate's attempts to break into the business arena. Still, he wasn't about to downplay the threat, and said BlackBerry has to do better.
"I love a good fight," he said.