Tomahawk, WI 01/08/2014 (BasicsMedia) – Blackberry Ltd. (NASDAQ:BBRY) has seen a very troubled 2013. The iconic brand has seen consumers jump ship in their droves, has narrowly missed out bankruptcy as well as has seen several take over bids fail at the very last step.

What woes BBRY?

The woes of BBRY started when its new product offerings did not click in the market. The smartphone maker lost customers very fast as offerings by competitors were well accepted. BBRY had a strong grip on the smartphone market as it offered far superior encryption services. So strong that several governments including the Indian government had asked it to ensure that they should be provided access to the encryption technology. Even today, many governments rely on the services offered by BBRY for their official usage.

The trends changed fast in the smartphone handset markets. Growing number of teenagers did not value the enhanced security. Even the marketing was not up to the mark as consumers were confused about the new offerings’ advantages. Trends had shifted from security to apps driven smartphones, and Blackberry appears to have faltered in reading the trends. This flowed inventory write-offs and a very bad quarter for Blackberry.

What about the future?

A take over bid failed at the very last minute. But, BBRY appointed a new CEO, John Chen. John Chen has a reputation of turning troubled companies around; everyone remembers his stint at Sybase. Chen has quickly chalked out a restructuring strategy. Understanding that it cannot sustain a prolonged battle in the smartphone handset market, Chen is embracing the company’s strengths and the handset business is not one of them.

He wants to reposition the company as an enterprise-first company. Rather than hunting for individual customers, such a step would ensure a larger and more stable customer base. He is also house-cleaning and has removed several key executives and replaced them by people from enterprise focused companies. One such recent step was the parting of ways with the Creative Director Alicia Keys. Alicia Keys is better known as an R&B recording sensation and Grammy winning vocalist and has little formal business training. The appointment of HTC Corp. and Sony Ericsson executive Ron Louks to head the devices businesses is also expected to send out a strong signal that Blackberry is not exiting from the devices business.

The Foxconn deal is also expected to take a lot of financial load off Blackberry’s back. The deal will allow the smartphone maker to offload substantial costs of the manufacturing operations including inventory risks.

While all these steps are in the right direction, the cash flows are still a major cause of worry. BBRY is burning more cash than it is generating and its cash reserves are only sufficient to cover only four quarters more.

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