BlackBerry CEO Briefs White House to Keep Obama Loyal

BlackBerry Ltd. (BBRY) Chief Executive Officer John Chen has held talks with the White House to ensure President Barack Obama and other staff members continue to use their BlackBerry devices.

“As part of my meeting customers I have briefed the White House from an IT perspective,” Chen said in an interview yesterday with Bloomberg Television at Oasis: The Montgomery Summit in Santa Monica, California. “It’s just customer outreach -- and they were nice enough to share some of their thoughts with me.”

Chen, who has met or talked to more than 100 clients since taking over as CEO in November, declined to elaborate on what he discussed with the White House beyond saying it was about “some of the stuff they like and some of the stuff they would like us to work on.”

Chen is trying to shore up the Canadian smartphone maker’s base of heavy e-mail users in government and business, clients who rely on the sophisticated encryption technology its software and servers provide. Last week, at a trade show in Barcelona, Chen revealed the Q20, a phone he calls the Classic because it brings back buttons dropped from recent models, and he introduced a more secure version of the BBM instant-messaging service.

Photographer: Brendan Smialowski/AFP/Getty Images

U.S. President Barack Obama looks at a Blackberry device during a basketball game at the University of Maryland's Comcast Center in College Park, Maryland on Nov. 16, 2013. Close

U.S. President Barack Obama looks at a Blackberry device during a basketball game at... Read More

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Photographer: Brendan Smialowski/AFP/Getty Images

U.S. President Barack Obama looks at a Blackberry device during a basketball game at the University of Maryland's Comcast Center in College Park, Maryland on Nov. 16, 2013.

“For a variety of reasons, including some security-related, we don’t talk about” Obama’s phone publicly, said White House spokesman Josh Earnest. White House staff members are issued BlackBerrys by the government, Earnest said. The U.S. president has been photographed with a BlackBerry.

Turnaround Plan

Getting back in customers’ good graces is part of Chen’s plan for a turnaround at Waterloo, Ontario-based BlackBerry. The company’s shares have soared 53 percent since he took the helm, recovering ground after losing more than 90 percent of their value since a 2008 peak. Chen has said his other priorities include expanding the instant-messaging business and returning the server unit to growth.

BlackBerry fell 1.3 percent to $9.91 today.

Just as he extols the virtue of some older phone features, Chen said he sees value in other vestiges of BlackBerry’s past. That includes the company’s old name, Research In Motion Ltd. (BB), which was cast aside by his predecessor Thorsten Heins last year to bolster the BlackBerry brand name.

“I personally like Research In Motion a lot better,” Chen said.

Still, what’s done is done, Chen said.

“I have never given one nanosecond of thought to changing names,” he said.

Photographer: Patrick T. Fallon/Bloomberg

John Chen, chief executive officer of BlackBerry Ltd., is trying to shore up the Canadian smartphone maker’s base of heavy e-mail users in government and business, clients who rely on the sophisticated encryption technology its software and servers provide. Close

John Chen, chief executive officer of BlackBerry Ltd., is trying to shore up the... Read More

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Photographer: Patrick T. Fallon/Bloomberg

John Chen, chief executive officer of BlackBerry Ltd., is trying to shore up the Canadian smartphone maker’s base of heavy e-mail users in government and business, clients who rely on the sophisticated encryption technology its software and servers provide.

‘Bridging Worlds’

Chen is working to reduce BlackBerry’s risks of unsold inventory by teaming with Foxconn Technology Group to design, build and distribute BlackBerry phones. The first of those new phones, the sub-$200 Z3, will go on sale in Indonesia in April, with the Q20 Classic probably appearing around September or October, Chen said yesterday.

“I have to be making sure that the user interface is one that has a modern technology as well as letting the old user base -- like the Bold 9900 -- be comfortable,” he said. “I am bridging the two worlds, and that takes a little while.”

Chen has been quick to defend BlackBerry from those who’ve dismissed it as a relic. T-Mobile US Inc. (TMUS), the fourth-largest U.S. wireless carrier, last month offered incentives for customers to trade in their BlackBerrys for Apple Inc.’s iPhones.

SAP Partnership

“I would have thought it would have been a more natural partnership, to help each other out to get better penetration in the market,” Chen said. “So, although I don’t like it, it won’t hurt that much.”

Chen, who turned around Sybase Inc. more than a decade ago before selling it to SAP AG (SAP) for $5.8 billion, has recruited former SAP colleagues to join BlackBerry and says he maintains regular contact with SAP co-CEO Bill McDermott.

“Bill understands that it’s important for me to help stabilize the ship,” Chen said. BlackBerry is a partner and a customer of SAP, he said, and the two just signed a deal last week to put SAP’s Fiori apps onto BlackBerry 10.

“There’s a lot to be done between the two of us,” Chen said.

To contact the reporters on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net; Jonathan Erlichman in New York at jerlichman1@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net Crayton Harrison

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