John Chen Is BlackBerry's Only Hope

If BlackBerry has any chance of turning this around, it's CEO John Chen himself.

Feb 6, 2014 at 8:00PM

This is a critical time in BlackBerry's (NASDAQ:BBRY) history. The company is either writing the last chapter to a mobile tragedy, or is experiencing an inciting incident that will forever open new opportunities.

BlackBerry's CEO, John Chen, believes it's the latter. If there's one opportunity BlackBerry has, it's not in the company's mobile strategy, manufacturing agreements, or a messaging app. It's in John Chen himself.

Blackberry Device
Source: BlackBerry.

One man with many plans
Chen's credentials are well known by many investors. He took over Sybase in 1998, which was both losing money and seeing its stock price plummet -- sound familiar? Chen cut jobs, slashed costs, and repositioned the company's competitive angle. Within a year the company was back to profitability, and he was able to sell it for $5.8 billion in 2010.


Source: BlackBerry.

But Chen's ability to turn around BlackBerry's fortunes will take much longer, if it even works at all.

Chen's attacking BlackBerry's turnaround from varying angles, using its enterprise server business, the BlackBerry messaging app, and hitching the business to what he calls "regulated industry" customers.

These regulated industries include customers like banks and government entities, ones that have been the crux of BlackBerry's business for quite some time. But they've also been the one's who've attributed to the company's demise as well. Bring-your-own-device trends have hit BlackBerry hard, and don't look like they're reversing any time soon

Chen wants to win them back by managing their device servers, while remaining device agnostic. That's the idea behind the future of BlackBerry Enterprise Server, and the new BlackBerry Enterprise Server 10 Cloud. The cloud version is aimed at mobile management hosting through for iOS, Android and BlackBerry devices .

Aside from BES, Chen is hanging part of his hat on BlackBerry Messenger. BBM is free for BlackBerry, Android, and iOS users and is Chen's way of building back the company's brand. The service doesn't make a dime right now, though Chen has said it could bring in revenue in the coming years. So far, the messaging service is doing well based on user statistics, with 40 million Android and iOS registered users at the end of December. But with so many other messaging apps out there, it's hard to imagine how BBM will differentiate itself from the pack over the long term.

Before Chen took over, BlackBerry announced it would cut about 40% of it's workforce, which equaled about 4,500 employees. To further save costs, BlackBerry made a deal under Chen to farm out its device manufacturing, and some design, to Foxconn. This came after BlackBerry had to write-off $1.6 billion in BB10 inventory just last quarter.

Though Chen's strategies of cutting costs, building back the BlackBerry brand and expanding its BES business all sound plausible, it's hard not to think the company is already too far gone. 

Foolish thoughts
Boosting BES sales, adding BBM revenue, and cutting costs further won't be easy for BlackBerry. In the quarter ending in December, the company saw its revenue drop 24% sequentially and suffered an operating loss of $4.4 billion. To make matters worse, a recent report by Consumer Intelligence Research Partners showed that BlackBerry's current market share in the US is zero.

BlackBerry's brand is cracked and damaged, and at this point even a successful BMM strategy, whatever that is, is unlikely to change that. As for Chen's focus on selling BES to regulated industries, the problem comes as these entities look 10 years down the road. As they implement new device server strategies, they'll wan to make sure they sign on with a company that's in it for the long haul. So why gamble on a company that had a for sale sign in its front yard just a few months ago?

Investors may be lured into to buying, or keeping, BlackBerry stock based on "what if" theories. It's not completely unwarranted given Chen's experience turning around a failing company, but from almost every angle it seems unwise. Sure Chen has cut costs and has some plans in place for growing the company's businesses, but with massive losses and brand apathy BlackBerry is already living on borrowed time. Though Chen's strategies may give investors a "what if" hope, it may be better for investors to ask, "What if this all doesn't work out?"

6 stocks for ultimate growth
They said it couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.


Fool contributor Chris Neiger has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers