There’s no denying that John Chen has done a fantastic job turning BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) around. Through cost-cutting, asset sales, and a strategic refocus, he’s put the company on much sounder footing.
That said, BlackBerry still has some big issues and getting them resolved will be critical to the company’s success. These problems mainly centre on the handset business. Below we take a look at three problems in particular.
1. The “cool” factor
One of BlackBerry’s biggest problems is actually very simple: its phones simply are not “cool.” In other words, you can actually get teased for owning a BlackBerry phone. Personally, I don’t like being called a dinosaur and to my knowledge, few people do. So, regaining the cool factor is a big priority for BlackBerry, something acknowledged by Mr. Chen in a recent interview with CNBC.
This is will not be easy. After all, BlackBerry’s brand has been hurt by declining sales. And when the brand deteriorates, sales decline further, sustaining a vicious cycle.
Even worse, BlackBerry’s poor brand may even be affecting its software business, something I addressed in a recent article. So, getting this cycle turned around is absolutely critical. Time will tell if Mr. Chen’s efforts will bear any fruit.
2. Consumer inertia
A big part of Mr. Chen’s job is asking customers to switch back to BlackBerry. Unfortunately for Mr. Chen, switching phones is usually a big hassle.
Think about what’s on your phone. It usually contains music and pictures, but can also contain movies, documents, and other files. When asked about this, Mr. Chen pointed out that there are apps to help you transfer all those files. But the hassle to switch doesn’t stop there.
I can speak from experience. Two years ago, I switched from an iPhone to an Android device. Not only did I have to transfer my music, but I had to download all my favourite apps again. I had to get used to the new screen, the new keyboard, and the new operating system. Switching to a BlackBerry, along with its keyboard, would have been an even bigger hassle.
True, these are first-world problems. But if one has to spend an afternoon switching devices, it could prevent a lot of people from buying a BlackBerry.
3. A lack of apps
Let’s face it: BlackBerry could build the world’s greatest phone, with the most powerful processor, best screen, and longest battery life, but it would still be a tough sell simply because it doesn’t have enough apps.
True, you can run Android apps on a BlackBerry device. But Android apps were made for Android phones, and typically don’t work so well on BlackBerry devices. For instance, the square-shaped screen on BlackBerry’s Passport phablet may not be suitable for Android apps designed for a 5.59 x 2.85 inch screen.
Mr. Chen said he is working on something to help with this, although he didn’t give any more details. Let’s just say that it better be good.
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Fool contributor Benjamin Sinclair has no position in any stocks mentioned.