Dec 20, 2013 10:40 AM EST
Blackberry Hopes To Recover From $4.4 Billion Decline With New CEO And Partnership With Chinese Manufacturer
Remember Blackberry? It was relevant not that long ago (the fastest growing company in the world in 2009, according to Fortune), though in the tech industry the time has felt like ages. For falling out of touch with consumers, the cost has been high. The company lost $4.4 billion last year, made 56 percent less revenue this quarter as compared to the same quarter last year, and its stock has decreased by 90 percent since February 2011, among other alarming statistics announced in a press release on Friday, Time reported.
The fate of Blackberry is now largely based on new CEO John Chen, who took over in November. His biggest move to date -- a five year partnership with Foxconn -- was also announced on Friday. Foxconn, a string of Chinese factories and the "world's largest manufacturer of electronic products and components," will play a role in developing, manufacturing, and storing Blackberry's products, according to the release.
"This partnership demonstrates BlackBerry's commitment to the device market for the long-term and our determination to remain the innovation leader in secure end-to-end mobile solutions," said Chen. "Partnering with Foxconn allows BlackBerry to focus on what we do best - iconic design, world-class security, software development and enterprise mobility management - while simultaneously addressing fast-growing markets leveraging Foxconn's scale and efficiency that will allow us to compete more effectively."
Blackberry would appear both cautious and optomistic of its future. Though the losses continue to pile on, the company's downsized considerably -- it plans on cutting 4,500 jobs -- to mitigate operational costs, according to Time. The hiring of Chen, known for his turnaround of the software company, Sybabse, and the partnership with Foxconn are positive signs. Blackberry officials also regularly point to their strong cash position. Yet, technology analyst Colin W. Gillis believes Blackberry has just six semesters to show improvement, or it could sell for a price over $3 billion less than what it is currently worth (around $5 billion to just over $1 billion).
"While we have respect for his prior efforts at turning around Sybase, and see the logic behind his likely repositioning of Blackberry into an enterprise software and services company, the task ahead is daunting," Gillis told Time.
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