BlackBerry CEO: I'll kill off BlackBerry phones if they don't start making money

Michael Homnick

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BlackBerry yanked its phones from T-Mobile stores after a T-Mobile ad campaign suggested customers should trade in their BlackBerry for an iPhone, but on Thursday, new BlackBerry CEO John Chen said he's not averse to snuffing out the iconic handsets completely if BlackBerry phones don't start making money once again.

"If I cannot make money on handsets, I will not be in the handset business," Chen told Reuters.

Slow to respond to the rising threat of the iPhone and Android, BlackBerry pinned its hopes on the long-delayed release of the BB10 operating system in 2013—but the new phones tanked hard, dragging BlackBerry's revenues into the toilet with them. Last quarter alone, BlackBerry phone sales dropped a whopping 77 percent despite the September release of the 5-inch BlackBerry Z30, and the company laid off 40 percent of its employees late last year to try to right the sinking ship.

The BlackBerry Z10, BlackBerry's major touchscreen-only BB10 phone, was a major hope for the company but didn't move many units.

Chen told Reuters that BlackBerry's phone line could be profitable if it sold just 10 million per year, a fraction of the 52.3 million handsets it moved in 2013. Unfortunately, hitting that modest goal may prove difficult. The IDC research firm says BlackBerry managed to move a mere 1.7 million phones in the crucial holiday season. But hey, that's better than other estimates; market research firm CIRP says BlackBerry accounted for zero—yes zero—percent of the consumer phone market last holiday season.

No matter how you count it, the numbers are grim. But Chen isn't ready to throw in the towel on hardware just quite yet.

"I don’t have a plan to get rid of handsets, I have a plan to not be dependent on handsets," Chen told Bloomberg Businessweek on Thursday, in a separate interview. "All I need to do is replace the handset revenue, and this company will be very different."

Update: Chen reiterated that he has no immediate plans to kill out the phones on the BlackBerry blog. "I want to assure you that I have no intention of selling off or abandoning this business any time soon," he wrote.

Moving beyond phones

To do so, Chen and BlackBerry have been doubling down on software and secure communications. The company's legendary BlackBerry Messenger service was recently released for Android and iOS, and a Windows Phone version is coming soon, expanding the service beyond the BB ecosystem for the first time and quickly racking up millions of downloads.

BlackBerry Messenger is spreading its wings beyond BlackBerry hardware.

The company also hopes to bring its QNX operating system to connected devices (like cars), and both Bloomberg and Reuters report that Chen plans to focus on serving heavily regulated industries such as healthcare and government agencies with software and hardware alike, leaning on BlackBerry's strong enterprise background.

Speaking of hardware, Chen's also returning to BlackBerry's roots by continuing to push forward with phones with physical keyboards, despite ho-hum sales of the BB10-powered Q10 (pictured at the top of this article).

Whether or not BlackBerry's legendary phones will live on or fizzle out is still an open question, but one thing is for certain: BlackBerry is once again focused on all business, all the time. "We are not going to spend any more money to maintain the latest version of Angry Birds," Chen told Reuters.

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