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A Canadian flag flies at BlackBerry's headquarters in Waterloo, Ont., Tuesday, July 9, 2013. (Geoff Robins/THE CANADIAN PRESS)
A Canadian flag flies at BlackBerry's headquarters in Waterloo, Ont., Tuesday, July 9, 2013. (Geoff Robins/THE CANADIAN PRESS)

technology

Interim CEO Chen takes the reins at BlackBerry Add to ...

The John Chen era got under way at BlackBerry Ltd. Wednesday, with the smartphone company’s new executive chairman and interim CEO saying in an open letter that the company is “not dwelling on the past” as it attempts to fix its business.

The former Sybase Inc. CEO said on a company blog addressed to “our BlackBerry community” that “there is more work to be done,” adding, “I know that it’s going to take time, discipline and tough decisions to reclaim BlackBerry’s success and we are ready for that challenge.”

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Mr. Chen assumes leadership of the company during a critical period. The company is in the midst of a severe cost- and job-cutting campaign in response to rapidly declining sales, after this year’s failed launch of its new BlackBerry 10 platform.

He replaces Thorsten Heins, who agreed to step down after the company’s largest shareholder, Fairfax Financial Holdings, abandoned a proposed takeover and instead led a $1-billion financing, which closed this week.

The new CEO, who will receive a lucrative pay package and use of a corporate jet to commute from his home in California to company headquarters in Waterloo, Ont., offered few clues in the letter about his strategy for turning around the beleaguered firm, but said he wanted “our customers to know that BlackBerry has significant financial strength for the long-haul,” and that he believes “in the value of this brand.” He spent the day meeting customers, a company spokesman said.

“I wouldn’t expect him to lay out a new strategy within a week, in four paragraphs, publicly,” said Veritas Investment Research analyst Neeraj Monga. “That is too much to ask. He needs to reassure first, reassess next and redefine later. He has done the first thing. This is a good start.”

He noted that Mr. Chen’s letter “is much more positive” than Stephen Elop’s infamous “Burning platform” memo that he wrote to employees of Nokia in February, 2011, shortly after becoming CEO. In that memo, the Canadian-born Mr. Elop likened the wireless phone company’s situation to that of an oil rig worker standing on a burning platform, faced with the choice of either burning to death or jumping several storeys into the icy ocean.

By contrast, Mr. Chen said he is “confident that we will rebuild BlackBerry for the benefit of all our constituencies” – an upbeat message that is at odds with much of the industry commentary about the company.

The letter is “an attempt by BlackBerry and Mr. Chen to reassure its customer base,” said research analyst Jack Gold. But he added “this is a temporary measure at best. [They] have about six to 12 months to show some real change and significant strength … I think it possible but, at the end of the day, the question is, can BlackBerry execute? I think they can, but it won’t be easy.”

His letter arrived two days after a U.S. defence newspublication, Defense One, quoted a spokesman for the U.S. Defence department, one of BlackBerry’s largest and most loyal customers, saying it is considering moving to “multiple vendors to support its mobile communications needs.” If so, the Pentagon would join a long line of corporate and government customers that had previously deployed only BlackBerry smartphones to employees, but have since moved to other providers so their employees can use Apple and Android devices instead.

 

Follow on Twitter: @SeanSilcoff

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