BlackBerry CEO defends strategy

Howard Solomon

11 years ago

BlackBerry Ltd. CEO Thorsten Heins has shrugged off worries of investors and industry analysts about the company’s future after what some saw were disappointing first quarter results were released last month.

“I’m wearing a new suit and its not made of Kevlar. I can still take the punches,” he told shareholders Tuesday at the company’s annual general meeting in Waterloo, Ont. “We will have to continue to take punches. This will not be an easy path.

But he insisted that “we’re doing the right things.”

He acknowledged that investors expected better results and faster progress from the company, which has been losing market share for over a year. “This is a long-term transition,” he added, “but I assure you we are pushing very hard to show you improvements.”

“The smart phone market isn’t defined in weeks of sales, or from one quarter to the next…There will be not just one or two winters in the market. It’s important how you position yourself, it’s important what you stand for, it’s important what segments you are pursing.”

On the other hand, he didn’t try to gloss things over. “It is a rocky road, there is no guarantee of success.” But, he added, there is a “fantastic opportunity” to make BlackBerry a significant company in mobile computing and is confident it will be.

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When a shareholder asked him what BlackBerry will do to improve its perception in the U.S., where he said Wall Street and consumers are not giving the new products “a fair shake,” Heins suggested some guilty of short-term thinking. When the fourth quarter results were issued earlier this year, Heins said, he said the company is “approaching break-even.” That, he said, implies there would be “a slight loss” in the upcoming quarter.

Still, he received loud applause from shareholders at the meeting — many of whom are BlackBerry employees or former staffers — when he said “I’m here with my team to create jobs, not to destroy jobs.’

Heins said the company is just starting phase two of its plan, after restructuring the company, saved $1 billion, trimming its supply line and launching the BlackBerry 10 platform and the first three new handsets (the Z10, the Q10 and the Q5).

This fiscal year will be about build and investing in the future by pushing adoption of the BES 10 platform, making the BlackBerry Messenger service “the social network platform of choice,” leveraging the company’s global data network beyond traditional uses and releasing several more BB10 devices. This phase, he said, is about building scale.

The final year of the plan will see a focus on returning to profitability and emphasizing BlackBerry as a mobile computing platform.

Heins repeated statements that the company is open to partnerships and alliances. But when asked by shareholder Vic Alboini, chairman and CEO of Jaguar Financial Corp., a Toronto merchant bank that has been highly critical of RIM management, if the company is considering breaking BlackBerry [TSX: BB] into hardware and software/services units, Heins demurred. His priority, he said, is to make the company bigger.

Once it is in a strong position in the market, “then what ever happens we’ll look at. Until then I can’t distract management.”

At the meeting the company officially changed its name from Research In Motion to BlackBerry.