BlackBerry seeks partnerships to expand in China

BEIJING — BlackBerry chief executive officer John Chen said he was interested in partnerships to expand in China — the world’s largest smartphone market — after meeting the heads of Xiaomi and Lenovo.

BlackBerry’s strengths in security, encryption and privacy are in demand in the country and there may be opportunities for agreements on technology licensing, distribution or manufacturing, said Mr Chen on Monday in Beijing, where he was attending the Asia-Pacific Economic Cooperation (APEC) CEO Summit.

During the summit, Mr Chen said he had met Xiaomi CEO Lei Jun and Lenovo’s head Yang Yuanqing. These meetings with China’s two largest smartphone vendors come at a time when BlackBerry is trying to return to growth, after declining phone shipments dragged it to net losses in each of the past three years.

“It does seem that a more efficient way is to have a good partner to be here,” Mr Chen said in the interview. “I’m here this time to look at what opportunities there may be. We have not really focused on this market. It’s a huge market, but it’s a very highly competitive one too.”

Mr Chen said he had also met Taiwan-based HTC Corp’s chairwoman Cher Wang. He took the helm of BlackBerry a year ago to lead a turnaround, after shipments of its smartphones plunged in the past four years as it struggled to compete with touch-screen devices produced by Apple and Samsung Electronics.

The Hong Kong native outsourced some production, sold property and focused on business customers by reviving phones with signature physical keyboards and offering more software-based services. The changes have helped put the company on track for break-even cash flow by the end of this fiscal year and a return to profit the next year, Mr Chen reiterated.

Last year, there were 19.2 million smartphones shipped with the BlackBerry operating system, down from 51.1 million units in 2011, data compiled by Bloomberg showed.

The company in September released its new square-screen Passport smartphone, which sold 200,000 units in its debut. The device is designed for business users who write emails, study spreadsheets and read documents on their phones.

Mr Chen has said he is already at work on a new concept for devices set to debut next year, including one at Mobile World Congress in March. Another version of the Passport is also in the works, he has said.

The company attained 16 per cent of its sales from the Asia-Pacific region during the fiscal year that ended in March, compared with 19 per cent from the United States, data compiled by Bloomberg showed.

Now that the firm is returning to firmer financial footing, Mr Chen said the China market is one area where he is looking for growth. Of more than 40 million BlackBerry users worldwide, he estimated only a few hundred thousand units had been sold in China.

Mr Chen cautioned it is “way early” to be looking for results from the talks in China. “What I’m doing is to explore what is the right approach to the market, given what we do well, and I’m not shutting any doors,” he said.

“This market is not an easy one to get deals done quickly. It’s going to take a while, but I’m interested.” BLOOMBERG