BlackBerry Opts Out of a BYOD World

This story originally written by Nancy Gohring at CITEworld. Sign up for our free newsletter here.

Will he or won't he? The buzz since last night has been around comments that BlackBerry (NASDAQ: BBRY  ) CEO John Chen made to Reuters, saying that if he can't make money on handsets, he'll get out of the business.

Naturally, the reaction was that it's only a matter of time before BlackBerry stops selling phones. This morning, Chen tried to do some damage control.

"My comments were taken out of context. I want to assure you that I have no intention of selling off or abandoning this business any time soon," he wrote in a blog post.

See also: Blackphone maker Silent Circle climbs the security cliff one step at a time

What does this all mean to you? If you had considered BlackBerry a contender as a phone that you'd buy and use for personal reasons and for work, forget it. BlackBerry is no longer interested in competing for BYOD business.

Chen made his intentions much clearer in a Bloomberg interview this morning. He's hoping to replace declining hardware sales with software, a higher-margin business. Doing so, BlackBerry can become profitable on the same level of revenue, he told Bloomberg.

He reiterated that BlackBerry intends to focus on highly regulated industries, the kind that tend to have strict security requirements.

Because of those requirements, these businesses are more likely to issue phones to users. Or, they may let users choose their phone but stick with BlackBerry's backend servers, which they may have used for years and which now secure non-BlackBerry handsets.

Chen hammered home the idea that BlackBerry has lost interest in the consumer and thus the BYOD market when he discussed the falling out the company has had with T-Mobile  (NYSE: TMUS  ) . BlackBerry pulled its phones from T-Mobile following a T-Mobile promotion that rewarded customers for switching from BlackBerry phones.

He told Bloomberg that cutting ties with T-Mobile was easier than with AT&T or Verizon, given that T-Mobile is focused on consumers and not enterprises.

In a world that's increasingly supportive of BYOD, it's hard to see how Chen's strategy will keep BlackBerry phones alive. He might be able to continue to develop BlackBerry's server products to attract the most security conscious businesses. But since the server now supports other handsets, there's little reason for buyers – be they companies that are issuing phones or individuals told they can buy what they like -- to choose BlackBerry phones. 

Chen meant it when he told Reuters that he'd get out of the handset business if he can't make money off it, and it's hard to see how he can make money on such a tiny slice of the market. BlackBerry handset sales have already dropped below 1 percent globally. 

Recode's Ina Fried is right when she says that Chen's comments to Reuters were meant for a Wall Street audience, while his backpedaling blog post was meant to reassure customers that they made a good bet when they bought a BlackBerry phone. It's likely just a matter of time before Chen decides that he can't make money on his handset business and so it's time to get out. 

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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 13, 2014, at 5:22 PM, cbglobal wrote:

    It is impossible for Blackberry to "opt out" of BYOD, since in that world anyone can buy a Blackberry anywhere and use it on any network they want.

    So your premise could not be more wrong, even if you tried to be wrong on purpose.

    So once again, what was once a funny play on words; Motley Fool has become a cold hard factual description of its articles.

  • Report this Comment On April 13, 2014, at 7:00 PM, Sudi wrote:

    Far from ditching BYOD, you've completely ignored that BlackBerry has deployed a full on, very effective MDM (Mobile Device Management) package in the new BB10 platform. It supports Apple iOS, Google Android and soon Windows Phone in a containerized fashion (similar to Good Technology's GFE product) BlackBerry also supports native MDM/email on those products.

    Maybe BlackBerry's hardware business isn't focusing on consumer markets, but they are going full steam ahead with support of BYOD.

  • Report this Comment On April 13, 2014, at 9:49 PM, Zahhaz56 wrote:

    Must be all the Fools are short BBRY. Nice try Ms. B ohring, your article is opinion without facts. Misleading is an understatement. What you imply is an outright lie. Your article headline is salacious BS. Get a real job.

  • Report this Comment On April 14, 2014, at 10:19 AM, BR14 wrote:

    BlackBerry can't get out of handsets. And by definition that means they can't drop consumers or BYOD.

    The full BlackBerry security package works when a BlackBerry device is connected to a BES server.

    Any other combination doesn't come close. That's because the security is baked into the device at manufacture time.

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