Blackberry seeks China penetration via Lenovo

Canadian telecommunication and wireless equipment company BlackBerry Limited is seeking partnerships to push forward its plan to expand in China, which today is the largest smartphone market globally.

BlackBerry’s CEO John Chen met with his counterparts at Lenovo Group Ltd. and Xiaomi Corp. on Monday during his attendance at the Asia-Pacific Economic Cooperation CEO summit in Beijing.

Mr. Chen, who took over as CEO in November 2013, says his company’s strengths in encryption, security and privacy are in growing demand in China. He believes it is an ideal market for agreements on technology licensing, manufacturing or distribution.

Mr. Chen’s meeting with Lei Jun, Xiaomi’s CEO, and Yang Yuanqing, Lenovo’s Chief, China’s two biggest smartphone sellers, comes as the Canadian company is attempting to return to growth after three years of severe losses.

He also met Cher Wang, chairwoman of the Taiwanese manufacturer of smartphones and tablets HTC Corp.

In an interview outside the summit, Mr. Chen said:

“It does seem that a more efficient way is to have a good partner to be here,” Chen said in the interview. “I’m here this time to look at what opportunities there may be. We have not really focused on this market. It’s a huge market but it’s a very highly competitive market too.”

Mr. Chen says the toughest phase of BlackBerry’s turnaround is over.

Profitability is king, says Chen

BlackBerry’s number one priority today is to become profitable, rather than churning out a load of new smartphones, Mr. Chen explained, as his company enters the next phase of its turnaround.

Even though he has promoted an upcoming device with a physical keyboard, called the Classic, launching a string of new smartphones for the sake of it is no longer the company’s strategy, he stressed.

A year ago in an interview with Reuters, Mr. Chen said “Once we turn this company to profitability again, I will do everything I can to never lose money ever again. That is definitely something I am very focused on doing.”

Since taking over as CEO, Mr. Chen has managed to cut costs considerably, as well as agreeing on a five-year manufacturing deal with Foxcoon to jointly develop and manufacture some of BlackBerry’s cheaper devices. The company has even started hiring again.

In his previous job as CEO of database company Sybase, he managed to turn the struggling business around and sell it to SAP for $5.8 billion in 2010.

Mr. Chen assures that BlackBerry is through the hardest part of its turnaround.

“We will survive as a company and now I am rather confident, we’re managing the supply chain, we are managing inventories, we are managing cash, and we have expenses now at a number that is very manageable. BlackBerry has survived; now we have to start looking at growth,” he said.

In September, BlackBerry posted a smaller-than-expected second-quarter loss.

Mrs. Chen prefers Samsung

In an interview with the Financial Times, Mr. Chen talks about some embarrassing incidents regarding his wife’s Samsung mobile telephone.

Apparently, he and his wife went to a couple of parties where she pulled out her Samsung, to everybody’s surprise.

Mr. Chen explained “Everyone kind of looked at me funny. So eventually I said she needed to use a BlackBerry. ‘No, I like my Samsung,’ she said, and I told her she was embarrassing me.”