BlackBerry (NASDAQ:BBRY) (TSE:BB) Executive Chairman and CEO said their main goal this year is to make the company’s devices business profitable.
“The devices business must be profitable, because we don’t want to run a business that drags onto the bottom line. We’ve got to get there this year,” said Chen during the company’s annual meeting, which was attended by around a hundred people on Wednesday.
Chen previous indicated that they would decide on the future of BlackBerry’s devices business unit by September. During the recent quarters, the business unit recorded sales decline.
During the meeting, Chen stated that he sees better opportunity for BlackBerry by providing services that allows hardware to perform more tasks. He also said, “I don’t personally believe handsets will be the future of any company.”
BlackBerry previously dominated the smartphone market. However, the company failed to maintain its position and struggled to compete with Apple (NASDAQ:AAPL), Samsung Electronics (KRX:005930) and other smartphone manufacturers.
Samsung remained the leader in the smartphone market with 23.2% share followed by Apple with 14.8% share during the first quarter of 2016, according to Gartner.
Google’s Android operating system dominated the smartphone market with 84.1% share followed by Apple’s iOS with 14.8% share. BlackBerry’s operating system had only 0.2% share during the quarter.
When Chen joined BlackBerry in 2013, he made a commitment to reclaim the company’s success. He has been accelerating the company’s transformation from a device manufacturer into a software and service provider.
In a presentation to investors, BlackBerry showed its expectation that the market for the types of software it is developing will expand to from $525 million in 2012 to $17.6 billion in 2019.
Chen reiterated BlackBerry’s goal to increase its software revenue by 30% and to achieve a positive free cash flow this year. The company is scheduled to report its first quarter financial results on Thursday.
Some investors told Reuters that they optimistic with BlackBerry’s strategy, but others expressed skepticism.
Ken Tota, an investor in Fairfax Financial Holdings, the largest shareholder of BlackBerry, said, “I appreciate the strategy.” He also expressed optimism on the company’s renewed focus on security, which could help in its revival over the next five years. He said, “It’s a niche, but it’s a worldwide niche.”
On the other hand, a shareholder who attended the meeting, but refused to give his name to Reuters, commented, “The first word that comes to mind is lackluster. Time is running out.”