BlackBerry is under scrutiny these days as the company tries to get back into profitability. The company's stock has been downgraded recently and investors are looking for anything they can hold onto. Writing for the Motley Fool, Leo Sun says the upcoming BlackBerry Leap should be the last phone BlackBerry makes.
BlackBerry is in the midst of a turnaround as CEO John Chen tries to pivot the company to more software related revenue streams. Chen slashed costs and even sold off some real estate in an effort to help the balance sheet. He also opened up new software related revenue streams like BBM. His plan worked, but he has a long way to go before BlackBerry can rely on software revenue streams alone. In the meantime, BlackBerry continues to make hardware in an effort to stop the bleeding and bridge the gap. Mr. Sun says this is a mistake.
The problem is if BlackBerry stopped making smartphones they would definitely die a very quick death. The only chance they have now is to get people interested in their products again and that means new devices. BlackBerry's strength is its keyboard. People who love BlackBerry love the physical keyboard. BlackBerry should cater to that user base, even if it is small, and grow it like any startup would do. In the meantime, the company can also open new software revenue streams.
BlackBerry has been known for good security, but others have caught up in the security area. Is BBM still the most secure messenger? Not by a long shot. There are all sorts of new secure messengers like Chat Secure, Signal, Wickr, and Threema, to name a few. BlackBerry will have a hard time relying solely on their software business to remain relevant. I know they have BES and QNX, but those revenue streams will not be able to grow fast enough by themselves. BES is synonymous with the BlackBerry and the company needs new BlackBerrys to sell BES.
BlackBerry is in a serious catch 22 and it will be fun to see how John Chen pulls them out. They are doing a lot of good things, but the road ahead goes uphill. Let's hope Mr. Chen has some tricks up his sleeve.
What do you think? Should BlackBerry stop making hardware? Let me know in the comments.
BlackBerry is in the midst of a turnaround as CEO John Chen tries to pivot the company to more software related revenue streams. Chen slashed costs and even sold off some real estate in an effort to help the balance sheet. He also opened up new software related revenue streams like BBM. His plan worked, but he has a long way to go before BlackBerry can rely on software revenue streams alone. In the meantime, BlackBerry continues to make hardware in an effort to stop the bleeding and bridge the gap. Mr. Sun says this is a mistake.
BlackBerry is desperately launching new devices in a bid to stop the bleeding and give the software division time to catch up. However, developing and launching new devices keeps operating expenses elevated. That seems counterproductive, especially after BlackBerry reduced its operating expenses 73% year-over-year in the first nine months of 2014 by slashing R&D and marketing costs.
The problem is if BlackBerry stopped making smartphones they would definitely die a very quick death. The only chance they have now is to get people interested in their products again and that means new devices. BlackBerry's strength is its keyboard. People who love BlackBerry love the physical keyboard. BlackBerry should cater to that user base, even if it is small, and grow it like any startup would do. In the meantime, the company can also open new software revenue streams.
BlackBerry has been known for good security, but others have caught up in the security area. Is BBM still the most secure messenger? Not by a long shot. There are all sorts of new secure messengers like Chat Secure, Signal, Wickr, and Threema, to name a few. BlackBerry will have a hard time relying solely on their software business to remain relevant. I know they have BES and QNX, but those revenue streams will not be able to grow fast enough by themselves. BES is synonymous with the BlackBerry and the company needs new BlackBerrys to sell BES.
BlackBerry is in a serious catch 22 and it will be fun to see how John Chen pulls them out. They are doing a lot of good things, but the road ahead goes uphill. Let's hope Mr. Chen has some tricks up his sleeve.
What do you think? Should BlackBerry stop making hardware? Let me know in the comments.
Tags: blackberry leap