Tomahawk, WI 12/23/2013 (BasicsMedia) – After failing to get a good buying bid from interested companies, BlackBerry Ltd (NASDAQ:BBRY) perished the idea of selling itself and instead turnaround goal has taken center stage.

Since making it clear that it was more interested in retooling it operations rather than asking for buyers, the company has been cleaning its house. The board ousted former CEO and installed John Chen in interim capacity. Chen has led injection of about $1 billion in cash to the company and this amount is used in the turnaround efforts.

As part of his management change, Chen has accelerated the exit of the executives who served in the former management team of the ousted CEO and has, instead, been bringing his colleagues with whom he worked to turnaround Sybase.

New development

It seems that Chen is trying to be transparent with investors and some the things he is saying is that Blackberry Ltd (NASDAQ:BBRY) would need to focus on the businesses that are bringing it profits and can easily turn profitable. He is also being realistic that the company’s handset business requires tweaks to make it profitable going forward given that several writedowns have been made on the company’s inventory.

Blackberry Ltd (NASDAQ:BBRY) has not been able to win the market even with its latest smartphone line Blackberry Z10, much less Blackberry 10 and Blackberry 7 devices. This has precipitated massive writedowns which only hurts to the company’s woes.

In this environment, Blackberry Ltd (NASDAQ:BBRY) has entered into partnership with Foxconn Technology Co Ltd, a Taiwan company that will help it build low-cost devices. These low-cost smartphones will be sold in Indonesia and other emerging markets. It is important to note that among the smartphone markets, it is only in Indonesia that BBRY remains dominant.

On this announcement, shares of the struggling smartphone maker surged more than 17 percent in a single day last week.

The interesting thing in the deal with Foxconn is that Blackberry Ltd (NASDAQ:BBRY) will not be required to by upfront for the device components. This will be a good deal considering that the company’s financial position in wanting at the moment and upfront investment can only hurt its rebound efforts.


Blackberry Ltd (NASDAQ:BBRY) has several business opportunities besides the device segment. These include secure network solution, consultancy and patent licensing. The company can be seeking to boost these segments to offset the device losses. Secure mobile network solution is a particular segment that seems to carry a lot of life for the company and the interim CEO Chen has seen this already.

Just recently, Pentagon was reported to switching to BBRY-based network for its communication devices and this was seen as positive sign that the company was still in touch with big clients.

Price reduction on phone

The company is suffering from slow sales. At with fear of another streak of writedown, the company has been reported to be cutting the cost of its devices as incentive to boost sales. Blackberry Ltd (NASDAQ:BBRY) is hoping to use this strategy to drive more sale through carriers and distributors. At least on this note again, Chen is being truthful that the company must make unconventional moves to avoid huge losses in future.

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