Blackberry debates killing off handsets

dodoIt looks like Blackberry has placed its handsets production onto death row and, failing a last minute appeal, could be headed for silicon heaven soon.

Chief Executive John Chen said a decision would be made by September on the future of the unit, which has suffered a sustained drop in sales in recent quarters.

He sees better opportunity in providing services that enable increasingly commoditized hardware to do more.

“I don’t personally believe handsets will be the future of any company,” he said.

However Chen said he had not given up on handsets yet and had made it his top priority to make its devices business profitable.

“The device business must be profitable, because we don’t want to run a business that drags onto the bottom line. We’ve got to get there this year,” he said.

A few years ago, BlackBerry was once the smartphone market leader. The company was practically destroyed by a weird two headed CEO structure which watched as it was replaced by Apple and Google’s Android.

It has worked to reposition itself as a software and service provider focused on device management for large organizations, with some success.  Less successful has been its handsets.

In its presentation to investors, the company said it expects the broader market for types of software it is producing to expand to $17.6 billion by 2019, from $525 million in 2012 and below $4 billion in 2015, powered by growth in medical, legal, financial and automotive industries.

Chen said that BlackBerry wants to grow its software revenue by 30 percent in this fiscal year, which he estimated would be double overall market growth, and to notch positive free cash flow.