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BlackBerry may leave the handset market if it can’t turn a profit next year
Just as BlackBerry is looking to make an interesting change to its smartphone business, CEO John Chen has indicated that the company may consider exiting the handset market altogether, if its device division can’t turn a profit in the next year. The company has already stated that it is not opposed to abandoning handset operations if they remain unprofitable, but has previously steered clear of providing a time frame.
Chen also indicated that the company may consider dropping support for its BlackBerry 10 operating system after a year or two, providing that it can bring all of the security features over to Android. The company plans to support both operating systems in the near future. Even if BlackBerry was to exit the smartphone business, it may end up providing security options for Android via software.
“Sometime next year we have to make our device business profitable, otherwise I have to rethink what I do there. My job is to make sure the value of the company is protected and increases.” – BlackBerry CEO John Chen
The statements come ahead of the launch of the Android powered BlackBerry Priv, which is expected to arrive before the end of 2015. The handset features unique a slide out keyboard, as well as combining some of BlackBerry’s security and productivity tools with the popular Android OS.
The move over to Android will help address the lack of app available with BlackBerry’s current handsets and could help the company to sell a lot more phones. However, BlackBerry is still heavily invested in provided additional security features for the enterprise market and sees plenty of value left to be added in that market segment.
Given that BlackBerry smartphones now make up less than 1 percent of the global market, the move into Android and a single year to turn a profit seems like a bit of a last change saloon. BlackBerry states that it needs to sell around 5 million smartphones to return a profit.
BlackBerry is not the only smartphone company that may consider leaving the market if it can’t turn a profit in 2016. Sony recently made a similar statement about its own handset line-up, which has make a loss for successive quarters. Meanwhile, Nokia is expected to return to the smartphone market next year.
2016 is shaping up to be a key year for a number of legacy smartphone manufacturers. Do you think that the Priv will pay off for BlackBerry?