BlackBerry Returns to Keyboard Roots Under New CEO Chen

January 8, 2014 Leave a comment

BlackBerry Returns to Keyboard Roots Under New CEO Chen

BlackBerry Ltd. (BB), which struggled to entice customers with touch-screen models last year, plans to return its focus to keyboard-equipped phones under Chief Executive Officer John Chen.“I personally love the keyboards,” Chen said in an interview yesterday with Bloomberg Television’s Jon Erlichman at the International Consumer Electronics Show in Las Vegas. In the future, the company’s phones will “predominantly” have physical keyboards, he said, rather than touch screens.

Chen, who took the CEO job in November, is trying to rebuild the company after last year’s BlackBerry 10 touch-screen lineup fizzled with consumers — contributing to billions of dollars of writedowns. As part of his comeback plan, BlackBerry is refocusing on the corporate and government customers that fueled its early success. Those users preferred real keyboards because they made it easier to hammer out e-mails.

Last month, Chen announced a five-year deal with Foxconn Technology Group to outsource the manufacturing and design of some of its phones, aiming to offload more of the costs of its unprofitable manufacturing operations.

“Foxconn can be a really great partner, not only to eliminate my inventory risk, but also their ability to penetrate various different markets, call it the developing and emerging markets,” he said.

While the first Foxconn-built phone is expected to be a touch-screen device, Chen said the traditional keyboard will hold sway in the long run.

Keyboard Suit

In a show of how important keyboards are to the BlackBerry brand, the company is suing the maker of a snap-on keypad accessory for the iPhone, saying it closely resembles its products. That device — called the Typo Keyboard — is being unveiled this week at the CES conference.

The Typo, which clicks onto Apple Inc. (AAPL)’s iPhone 5 and iPhone 5s, violates BlackBerry’s patents and designs, according to the complaint. The maker of the keyboard, a Los Angeles startup founded by “American Idol” host Ryan Seacrest, said it would vigorously defend itself against the suit.

In another sign that Chen is focusing on corporate customers and not consumers, the company parted ways last week with pop singer Alicia Keys. BlackBerry’s previous CEO, Thorsten Heins, had hired her to serve as global creative director. She joined him on stage last January when BlackBerry unveiled the Z10, a touch-screen phone that flopped with buyers and led the company to write off almost $1 billion in unsold inventory.

BlackBerry shares rose 5.3 percent to $8.01 in New York yesterday, lifting the stock’s gain since the day before Chen announced the Foxconn deal to 28 percent.

BlackBerry earlier yesterday announced the hiring of former HTC Corp. (2498) and Sony Ericsson executive Ron Louks to run its devices business.

“Ron’s a very creative guy,” Chen said. “I think he’s more in touch with not only the technology and design to make a phone great but how people like the phone.”

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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