BlackBerry's Chen sees devices as more than just phones, focuses on Internet of Things opportunity

NEW YORK--BlackBerry (NASDAQ:BBRY) CEO John Chen said he thinks the company's device business is important--but he said he's spending much of his time looking beyond smartphones to the wider Internet of Things (IoT) market.

At a media event held here to formally unveil the company's new Classic smartphone, Chen said that at the Consumer Electronics Show next month BlackBerry will discuss its IoT platform for connected devices. Still, he explained that the company is invested in its device business.

"Device is very important to us. It's about half of our business," he said during a press conference. "It's also the precursor for all of the IoT market. I don't look at the devices as just the phone business. I look at devices as something that is much broader downstream."

Sandeep Chennakeshu, who previously served as the president of Ericsson (NASDAQ: ERIC) Mobile Platforms and CTO of Sony Ericsson, leads the unit that is developing BlackBerry's IoT platform. In September, Chennakeshu said the platform will be focused on connecting machines and people to information, and that it will also collect data that companies can use to take actions based on the data. He said the company wants to create a scalable and highly secure infrastructure for large-volume vertical applications such as fleet management.

The company's IoT platform will also use BlackBerry's mobile device management capabilities to manage and secure Internet of Things devices. In one example of what the platform could potentially enable, if a car dealership wanted to collect diagnostic information from a car to monitor when it is due for service, Chennakeshu said BlackBerry could securely manage that specific car's software and coordinate the data with the dealership. Another idea Chennakeshu mentioned is asset tracking, where the sender of a package might have access to data on where the package is, but the recipient could get more granular and secure data on the contents of the shipment.

BlackBerry's QNX subsidiary powers the software for around half the connected car market and QNX is also embedded in other machines. Yet BlackBerry will be going up against other powerhouse companies in the IoT market with more resources, including Qualcomm (NASDAQ:QCOM) and Intel.

Chen has said that in terms of phones, the company is focused more on profitability than on churning out new devices. The company will outline its device roadmap at next year's Mobile World Congress conference. Chen has said BlackBerry will focus on a handful of devices it thinks can make a splash in the market, including one new unconventionally designed phone, as well refreshes of the Passport, Classic and its mid-range Z3 touchscreen phone.

In an interview with FierceWireless, BlackBerry COO Marty Beard said that profitability is the company's laser focus. BlackBerry continues to believe it will produce break-even cash flow by the end its fiscal 2015 year, the end of February.

"They key goal is to make money," Beard said. "We need to show that we can generate positive cash flow. That then allows us to invest in both the device and the enterprise business."

"So, we've been innovating, but at the end of the day there's going to be that continued focus on making money because that's the foundation for many years, not just what's happening in the next six months," Beard said.

Chen said the company has been targeting core enterprise customers as well as "prosumers" focused on productivity. The company had to make choices about which markets it is going after, he added. "We don't want to get ourselves spread too thin," he said.

Chen acknowledged that BlackBerry's miniscule market share gives it less leverage with carriers than it had in the company's heyday before the advent of the iPhone and Android phones. However, Chen noted that Verizon Wireless (NYSE: VZ), Vodafone and Orange are among those supporting BlackBerry's new enterprise server.

"I think there is a strong, renewed interest with the key carriers around the world to work with BlackBerry," he said. "But I would agree with you, it's not without challenges."

AT&T Mobility (NYSE: T) and Verizon have agreed to launch the Classic, with AT&T promising it will eventually be sold in every single one of its rail stores. Rogers Wireless, Telus and Bell Mobility in Canada will also support the Classic. Beard said BlackBerry will bring the Classic to other markets, such as Europe and Latin America. "It's a full global launch," he said.

Related Articles:
BlackBerry brings back the keyboard with Classic phone, partners with AT&T, Verizon
BlackBerry takes a different tack on mobile health with apps for healthcare professionals
BlackBerry's Chen: Security concerns would likely scuttle a deal with a Chinese company:
BlackBerry teams with Samsung to increase security on Android
BlackBerry's Chen: The focus is more on profitability than new smartphones
BlackBerry plans more smartphones with unconventional designs

Suggested Articles

The FCC today voted unanimously to advance a proposal to reallocate the 5.9 GHz band to both unlicensed and C-V2X technologies.

Raymond James lowered its odds of the T-Mobile/Sprint deal getting approved from 85% to 55%.

The last of a six-part series attempts to round up the observations and the roadmap for the coming decade.