Can John Chen turn BlackBerry (BBRY) around?
Since he became CEO in November, the company has reduced costs through layoffs, cutting operating expenses and scaling back marketing. It also sold most of its real estate in the country’s native Canada.
This morning, BlackBerry reported a smaller-than-expected loss of $0.11 in the first-quarter. Revenue fell 69%, but beat estimates by $3 million. The stock has been trading up on that news today and is up more than 27% (as of Wednesday's close) since Chen took over.
So, can BlackBerry survive? Can it be a dominant smartphone maker once again?
Possibly yes. And no, according to Yahoo Senior Columnist Michael Santoli.
He said that it appears the company has stabilized financially and is improving a little faster than people thought. “So yes, I think there’s the chance for a turnaround, but you have to define what turnaround means,” he said.
Santoli said “turnaround” probably means that BlackBerry is a very niche smartphone maker, continuing to sell to business and government clients. One of those niche markets is customers who still want a physical keyboard on their smartphone. They'll be happy to hear BlackBerry is re-launching its Bold smartphone and a new model called the Classic later this year.
Santoli said being a small smartphone maker, as well as a software and systems vendor, could allow the company to be a small financially viable player, but it won’t necessarily be competing with large handset makers like Apple (AAPL) or Samsung.
“I don’t think it’s going to be an exciting turnaround story,” he said. “It’s going to be a lot more blocking and tackling.”