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John Chen has done a decent job resetting the narrative in his 13 months as CEO of BlackBerry Ltd. The company has cut costs and refocused on its core customers. It has struck a deal that protects its downside risk in the smartphone business but has still managed to launch one distinctive device (the Passport) and will unveil another, the Classic, aimed at diehard BlackBerry users, this Wednesday. It is focusing more on selling software and services by helping governments and businesses manage their fleets of smartphones. Time to roll out the "Mission Accomplished" banner? Hardly.

First, BlackBerry faces intense competition not only in devices (Mr. Chen's goal of selling 10 million smartphones in a market that has largely forgotten BlackBerry might be a challenge), but also in serving the device management needs of enterprises, where big players like Citrix, IBM and Google have moved in. The business is not BlackBerry's to take as it once was; the company has to win it back after taking too long to enable its customers to manage all their devices using its server software.

Mr. Chen also plans to derive $100-million in revenue in the fiscal year starting March, 2015, from his BlackBerry Messenger (BBM) instant messaging service. That's a stretch for a company whose service is a distant second-tier player against Facebook's WhatsApp in a business where revenues are small and spotty.

But there's something else among BlackBerry's moving parts that's even more distressing: Even if Mr. Chen can hit his two big goals for next year – doubling software revenues to $500-million, and bringing in $100-million from BBM – that $350-million revenue bump would still come nowhere close to offsetting a big revenue stream in steady decline: the service access fees BlackBerry charges users of its smartphones.

Those fees have been dropping steadily due to the declining subscriber base and because previous CEO Thorsten Heins bowed to long-standing carrier pressure and stopped charging fees for the new BlackBerry 10 model phones it launched last year.

This fee stream, which once topped $1-billion per quarter, is dropping at a rate of 10 per cent to 15 per cent a quarter. But it still accounts for a big portion of revenues, amounting to $424-million in the last quarter, almost half the overall total. The company has warned that will drop from about $1.6-billion this year to the mid-$800-millions level next year, a decline of more than $700-million. Some analysts expect it will fall even further.

Mr. Chen's plan would generate only $350-million in new cash – hard-won revenues that would have to be earned in the marketplace, compared to easy money that continues to flow in – albeit at a declining rate – with extremely high margins. "That fee stream is the lifeline that has allowed them to go through their reorganization," said Citi analyst Ehud Gelblum.

And if the Classic is a smashing success, it could conceivably lead even more users of the company's older products – which are still yielding those big fees – to trade them in for newer phones, which don't, hastening the fee decline.

Mr. Chen has enough challenges to deal with; it would be unfortunate if the Classic launch is so successful that it creates another one for him.