Why BlackBerry CEO John Chen Is Skeptical of Foldable Phones

“Everyone wants a bigger screen,” he continued, “but they (smartphones) have become bulky.”

Why BlackBerry CEO John Chen Is Skeptical of Foldable Phones
Why BlackBerry CEO John Chen Is Skeptical of Foldable Phones

Samsung Electronics and Huawei may be trying to redefine the smartphone’s future with new foldable models, but a CEO of a pioneer in the field isn’t buying it as innovation or particularly useful.

It isn’t the steep price tags of the Samsung Fold ($1,980) and Huawei Mate X ($2,600) or their larger form that make John Chen, chief executive of BlackBerry (ticker: BB), skeptical. He chalks up what he deems their limited appeal to a clear lack of innovation.

“I want something faster with functional upgrades,” Chen told Barron’s in an interview Wednesday. “There are no breakthroughs on the horizon. We’ve done fingerprints. We’ve done facial recognition. We’ve done iris technology.”

“Everyone wants a bigger screen,” he continued, “but they (smartphones) have become bulky.”

Chen’s hot takes on foldables—the devices created a stir at the Mobile World Congress show in Spain last week—explains why BlackBerry is no longer in the hardware business. It was a margin-crushing business that required the company to manufacture its devices while competing with the likes of Apple (AAPL), Samsung (South Korea: 005930), Huawei, and others.

BlackBerry hasn’t produced a phone since 2016, and instead is leveraging security and communications software and services from those devices to make business inroads in sales to corporate and government customers. Its phones are still on the market through a licensing agreement with Chinese consumer-electronics firm TCL. That company introduced a new version of BlackBerry at MWC amid all the chatter about foldable phones.

“It’s the right strategy; the issue is generating revenue quickly” in what are fledgling industries such as Internet of Things, health care, and connected cars, Jack Gold, principal analyst at J. Gold Associates, told Barron’s in a phone interview. More

By
Jon Swartz

https://www.barrons.com