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Why is BlackBerry still making phones? CEO Chen gives a very smart answer

BlackBerry CEO Chen Interview Phone Sales

One reason that BlackBerry is lucky to have John Chen at the helm is that, unlike his predecessors, he’s very much grounded in reality about the state of the company. So while former CEO Thorsten Heins was known for making delusional statements about there being nothing wrong with the company even though it was in a downward spiral at the time, Chen has helped stabilize things and has forced BlackBerry to focus more on its core strengths.

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One of those strengths, however, is no longer selling smartphones to consumers. In its last fiscal quarter, the company reported selling just 1.6 million smartphones worldwide, which is a steep fall from the days when it was a dominant player in the industry. So why is BlackBerry bothering to make new phones at all anymore?

In an interview with Business Insider, Chen makes some very solid points about how important BlackBerry phones are as niche products for corporate executives and government officials who absolutely need high-level security for their mobile communications. While Chen acknowledges there’s a lot you can do to make the iPhone and Android phones more secure than they are straight out of the box, at the end of the day they still won’t provide the level of security that BlackBerry devices do.

“If you look at the U.S. Army, they’re still rolling out all BlackBerry,” Chen says. If I tell them there are no more phones, I lose that account. The question is how do you make phones profitable at the volume those people represent?”

BlackBerry has very smartly been lessening its reliance on hardware sales and is focused more on mobile enterprise security software and services. However, for some customers it does make sense to have phones available as specialty items. From that perspective, it’s easy to see why BlackBerry should keep making new phones, even if none of them will be on par with iPhones or Android phones in terms of sales.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.