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Chen takes shots at BlackBerry’s rivals as he shares his strategy

John Chen, CEO of BlackBerry Ltd.

LUCAS JACKSON/REUTERS

New BlackBerry Ltd. boss John Chen continues to swat at critics and competitors, issuing an open letter that takes some direct shots at the company's rivals as he tries to convince the market the smartphone maker can turn itself around.

"It's been easy for competitors to promote negative stories about BlackBerry, focusing on the business of the past," Mr. Chen wrote in a letter published on CNBC.com and the website of The Globe and Mail. "But I'm not focused on who BlackBerry used to be – I'm focused on what BlackBerry will be today and in the future."

BlackBerry's future, according to Mr. Chen's plan, is rooted in its past. The company flourished when it dominated the market for so-called enterprise customers – corporations and governments – in part because of the strength of its security features. But as these customers began allowing their employees to use Apple and Android phones, they turned to firms other than BlackBerry to provide software and other services that help them manage their employees' wireless devices.

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BlackBerry's challenge now is to win back those customers in the so-called "mobile device management" business, or MDM, by convincing them it can manage non-BlackBerry smartphones just as well as the upstarts.

"When it comes to enterprise, we're still the leader," Mr. Chen wrote. "Don't be fooled by the competition's rhetoric claiming to be more secure or having more experience than BlackBerry."

"With a global enterprise customer base exceeding 80,000, we have three times the number of customers compared to Good, AirWatch and MobileIron combined. This makes BlackBerry the leader in mobile-device management."

The letter underscores BlackBerry's new direction under Mr. Chen, who took over as interim chief executive officer after a November shakeup that saw former boss Thorsten Heins leave the company. Just before Christmas, the company announced large-scale asset writeoffs and said it would begin outsourcing most hardware design and manufacturing of BlackBerry smartphones to Taiwan-based electronics manufacturing giant Hon Hai Precision Industry Co. Ltd., better known as Foxconn.

That move allows the company to cut its financial risk, Mr. Chen has said, and focus on selling devices, software and services to the business and government market. But his comments in Monday's letter remarks rankled at least one of BlackBerry's competitors.

"He has never explained how he plans to secure non-BlackBerry devices when he doesn't get the support of the [other] manufacturers," Alan Dabbiere, AirWatch LLC's chairman, said in an interview. "He never answers that concern. And claiming 80,000 customers is fine, but those are 80,000 BlackBerry hardware customers."

A BlackBerry spokesman said the 80,000 customers includes companies that are also using other devices. It had about 250,000 enterprise customers at its peak, before companies like AirWatch began taking market share.

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Mr. Chen has defended his strategy as necessary to be "more nimble and responsive to market demands and customer needs."

"Leveraging Foxconn's scale and efficiency will also allow us to compete more effectively and create speed to market since we can design for faster product life cycles," Mr. Chen said. "With a partner dedicated to our hardware, BlackBerry can focus on what we do best – iconic design, world-class security, software development and enterprise-mobility management."

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About the Authors

Carrie Tait joined the Globe in January, 2011, mainly reporting on energy from the Calgary bureau. Previously, she spent six years working for the National Post in both Calgary and Toronto. She has a master’s degree in journalism from the University of Western Ontario and a bachelor’s degree in political studies from the University of Saskatchewan. More

Sean Silcoff joined The Globe and Mail in January, 2012, following an 18-year-career in journalism and communications. He previously worked as a columnist and Montreal correspondent for the National Post and as a staff writer at Canadian Business Magazine, where he was project co-ordinator of the magazine's inaugural Rich 100 list. More

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