21st Nov 2013

Can Chen do for Blackberry what he did for Sybase?

In a confident but rather vague open letter last week, new interim chief executive of Blackberry, John Chen said “I know that it’s going to take time, discipline and tough decisions to reclaim BlackBerry’s success and we are ready for that challenge.” The statement is at odds with what industry commentators are saying about the ailing smartphone maker, but it is presumably an attempt at reassuring anxious employees, customers and investors.

In its hey-day Blackberry engendered a robust brand loyalty, but as the years have passed iPhones and Androids have lured that once loyal customer-base away from the brand; Blackberry has lost customers in droves. In the third quarter of 2013 Blackberry’s market share fell to a new low of below 2%.

So, Chen’s appointment comes at a critical time. It follows the disappointment of a failed takeover by Fairfax Financial Holdings, and the worrying news that the US Department of Defense is to replace its some 470,000 Blackberry devices with other brands. Pfizer also this week told its employees to see out their Blackberry contracts and then move to other devices, so with profits continuing to fall the future does not look bright.

Yet, Chen has an impressive track record and is no stranger to changing the fortunes of an ailing company. The Hong Kong native is best known as the former CEO of enterprise software and services company Sybase. Chen joined the company in 1997 as chief operating officer and a year later he was named chairman, CEO and president. The Sybase he joined was a very different company from the one he left over a decade later. Sybase was in dire straits in the late 90s, but Chen quickly and quietly built it back up. In 2000 it had its most profitable year to date, and by the time he left in 2012 it had been bought for $5.8 billion. Sybase was reportedly worth $362 million when Chen joined the company.

Chen has estimated that he will need six quarters to turn Blackberry around. With a plump sum in his pocket Blackberry are betting high on Chen, hoping that he can do for Blackberry what he did for Sybase. Time will tell. Though with his credentials and strong performance history he seems like a fair bet.

Hilda Goold



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