Stronger yet weaker: the Blackberry conundrum

Sales started declining, managements were changed and so on. The company was also hit by a couple of 'outages' which appeared to be avoidable. Its latest handset, the Z10, appears not to have succeeded; Blackberry's latest financial statement say most sales in Q3 of its financial year were of older devices. And yet, despite losing $4.4billion in just three months, the company says it is in a stronger cash position than it was earlier this year. It's a crazy world where a company can be weaker and stronger at the same time Only 45 days or so since taking over as chairman and ceo, John Chen has already cut a deal with Foxconn, under which the EMS company will be involved in designing new handsets, while managing the manufacturing and supply chain issues. Expected early in 2014 is a handset aimed at Indonesia and other 'fast growing markets'. While that might help Blackberry's cash flow if the phones 'take off', it doesn't suggest a great contribution to the bottom line. While Blackberry's $3.2bn cash reserve will sustain its operations for a while, Chen believes the company's financial performance will improve in the coming year. But he admits the challenge is to make money from its handsets division – and that may well be affected by how consumers perceive Blackberry in the future. Chen will, no doubt, be working on a line of new products for the short and long terms, but what will these devices have for people to grab them off the shelves? In a market where a handful of brands dominate, breaking back into the big time will be an immense task. It still seems more likely that Blackberry will exit the handset market gracefully and concentrate on its services operation. But who knows? You have a feeling that, at sometime in the not too distant future, Blackberry will be one of the standard case studies presented to those pursuing an MBA.