10 Tough Questions BlackBerry CEO John Chen Faced At Classic Launch

BlackBerry On The Rebound

BlackBerry CEO John Chen spent Wednesday morning introducing his company's latest smartphone, the Classic, to an audience of media members and industry analysts at a launch event in New York.

After showing off the phone's new features and talking about the company being poised for a positive turnaround, he was put on the hot seat during a Q&A session with critics.

The company head responded to questions regarding the future of the company, its app ecosystem lacking compared to the competition, and its play in both the consumer and enterprise markets.

Here are the 10 toughest questions Chen faced during the Classic Q&A session, followed by his responses.

Why does AT&T not yet carry the Passport?

I can't speak for the carrier, but they will carry the Passport. A lot has to do with what they have to put out on Christmas. It will be carried by AT&T.

I'm hoping the customer demand of the Classic will push my pals at AT&T a little harder in getting this going. They go through the distribution process. Nothing is wrong. Everything is on track and doing well.

Will the five major North American carriers have the Classic in stores before Christmas? If not, is that a concern?

Three of the five major Canadian carriers will have the Classic in stores before Christmas. AT&T and Verizon will have it in stores after Christmas ... sometime in the first couple weeks of January, they will carry it.

All things being equal, I would want it sooner, for the Christmas season, but we are delivering for our schedules. We want to make sure we take our time doing it so we do it right rather than it being full of software bugs. The people who are testing it, love it. We are working with the schedule we have. I would have loved it to be in stores before Christmas, but we couldn't get it done without sacrificing quality.

Were a lot of BlackBerry handsets selling out prior to this event? Can you give us any sales figures?

I am in a quiet period, so I don't want to say anything people can twist one way or the other. The Passport was under allocation obviously for a long time, because of our production money. It was being received better than we expected. I don’t know many other devices that are running on allocation.

[In regards to sales figures], I think you should probably wait until [the Friday earnings] for the announcement, because, as I said, I am in a quiet period. My colleague [COO Marty Beard] already said, "a lot," so whatever "a lot" means.

Why are you selling the Classic to consumers?

Our target audience we carve out is the professional consumer. That targeted audience is using our devices for productivity. Thirteen months ago when I joined the company, I had to make some choices on the market segment to go after. We designed the products, the hardware, the software and messaging technology that focuses on that. By not mentioning [it], does not mean we are not interested, but I want to make sure we don't spread ourselves too thin. Over time, I want to bridge the education gap. I think there are more and more people who want to do email, and focus on security and privacy and have long-lasting power who gradually would want to try out our product, but that is not something we are focusing on today.

S ince you've been CEO of the company, you've really positioned BlackBerry as a cross-platform services company, especially in the EMM space. How important is the devices business in terms of the overall picture of where you're going?

It's about the transition. Devices are very important to us because it's part of the hardware business. That's No. 1. No. 2 is it's a precursor to the IoT [Internet of Things]. I don't look at the devices as just a phone business. I look at the devices as something that is much broader downstream. That's what we're thinking about. Software is important to us, obviously, also with security management.

What's the plan for the BlackBerry Classic in places like China?

I'd love to be able to get to China with the Classic.

I think getting to China is a broader set of questions. We do have a small business in China. We went through China Mobile in the past, and we would love to enhance that with handsets. But in order to really play bigger there, you really have to go through more of a software, enterprise kind of a play.

I'm working hard at it. Looking at it at times ... We will have a China strategy.

Are you important enough to get the attention of carriers and leverage the marketing dollars that are needed to really move the needle on sales?

It will take a little bit of time. The answer to the questions is yes. You see that AT&T showed up today. You have seen that, lately, we have gotten a lot of support. When we launched our phone today, AT&T came on stage. A month ago, when we launched our enterprise servers, Verizon came on the stage. I think there is strong interest from the key carriers around the world to work with BlackBerry. But I agree that it's not without challenges. We have to put in marketing dollars. In some cases, it will be a money-losing proposition, at least for a while. I am fixated on making money. The No. 1 thing is making money and generating positive cash flow. It's the most important thing, because only through that process, we can invest for the future. Things are getting better and will continue to get better.

You are still missing some critical apps. Are you looking for a community to develop for you? How are you planning to get them to build or write code for your product?

We will work on the app ecosystem. I need a little bit of time because I can't fix everything at the same time. Just about 13 months ago, probably most of you thought our company would be history -- or gone. As much of the frustration I share with you about not having enough apps ... we are working hard at that. One path is through the Amazon relationship. Amazon is very supportive of us. Our app people today have been focusing on vertical apps like health care and banking. We call them regulated industry apps. The frustration is, I can't do everything at the same time, despite the fact that I agree with you. I have to take it a step at a time. But then the argument is, 'Do you have that much time?' And the answer is, 'Yeah, I think so.'

Is BlackBerry still a Canadian company with you not living in Canada and many of the launches being all over the world? How important is your Canadian market?

Well, right after this I'm going to Canada. It's snowing by the way in Waterloo. I just got the text. It's very important that we're a Canadian company. A majority of our engineers are in Canada. We get tremendous support, not only from the Canadian government but [from] the carriers ... I don't think you should interpret anything. By the way, we launched the Passport in Toronto. That is my quote-unquote first product launch. It is important that we stay a Canadian company, and we will.

What is your thought about the Apple-IBM offerings?

I think they came out with Workflow. If I'm not mistaken, it came from a package called MobileFirst. MobileFirst already runs on BlackBerry, so that's No.1. Second thing is I love the fact that they are doing this because it tells us the market is big enough, and we will win our share. We will work hard, and I wouldn't say we're doing the same thing. I am more focused right now on medical and financial at this point. It will be much deeper than what they are doing now with Workflow.