BlackBerry CEO: We will cut phone production down to 1-2 per year

BlackBerry's (NASDAQ:BBRY) CEO said the company will no longer release four phones per year. Instead, he said, the company plans to release only one or two high-end phones per year in order to save costs and focus more on enterprise software and services.

"We make four phones a year… We are not going to do that anymore," BlackBerry CEO John Chen told Fox Business. "We are going to at least cut it down to a lot less number, maybe two, maybe one… and [shift] those resources [to] the security and software side."

In separate comments to Bloomberg, Chen said BlackBerry would no longer target the low end of the smartphone market, which is already crowded with a range of Chinese and Indian smartphone vendors. "It'll be a high-end phone that you can walk into AT&T and get it, as a professional," Chen told the publication. "The low-end phone is not BlackBerry's sweet spot."

The comments are notable considering BlackBerry's most recent smartphone is the touchscreen Leap, aimed at consumers who want an inexpensive touchscreen phone.

Chen's intention to retreat from smartphones comes as little surprise. In February, research firm IDC said BlackBerry was the only operating system vendor that sold fewer units in 2014 than it did in 2013. For all of 2014 the company shipped just 5.8 million smartphones, good for 0.4 percent global market share, down from 19.2 million shipments and 1.9 percent share in 2013.

In the company's most recent quarter, BlackBerry reported its hardware revenue fell to about $263 million, down from $379 million in the year-ago period. BlackBerry recognized revenue on only 1.1 million devices.

Indeed, BlackBerry earlier this week reported it would begin another round of job cuts as part of a wider restructure as it tries to offset weak smartphone sales. The company declined to disclose how many employees will be affected in the latest change, noting only that some were shifted to different roles while others were laid off.

Under Chen, the company two years ago threw away its efforts to tackle the consumer smartphone market with its BlackBerry 10 operating system and phones, and instead refocused on sales of software to enterprise buyers. And that effort, Chen said, continues to progress.

"I'm pretty satisfied with the progress on the turnaround so far," Chen told Reuters. "I laid out the $500 million software revenue target and I'm still comfortable with that commitment for this fiscal year, it looks good." However, he clarified that BlackBerry won't see real traction in the market for the next 12 to 18 months, down from his previous forecast of six months.

Chen's statements coincide with BlackBerry's purchase of AtHoc this week, a company that offers secure, networked crisis communications.

As part of an effort to scale up its enterprise sales efforts, BlackBerry earlier this month announced it appointed veteran sales executive Carl Wiese as president of its global sales division.

For more:
- see this Mobile World Live article
- see this Reuters article
- see this ZDNet article
- see this Fox Business article
- see this Bloomberg article

Related articles:
BlackBerry's Chen doesn't entirely close door on Android device
BlackBerry reports stronger software sales than expected amid turnaround push
Analysts: BlackBerry's push into software isn't picking up steam yet

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