BlackBerry Taps Former Sony-Ericsson CTO To Head New Unit As Q2 Shipments Rise

Ailing smartphone pioneer BlackBerry (NASDAQ: BBRY), which has made some progress in turning itself around under CEO John Chen, has named former Sony-Ericsson chief technology officer Sandeep Chennakeshu as the head of a new unit that will combine most of its intellectual property, including 44,000 patents.

Chennakeshu starts immediately as president of the unit, to be called BlackBerry Technology Solutions, or BTS, the Canadian company said in a statement on Monday. The unit comprises BlackBerry’s QNX software, the Project Ion internet-of-things platform, Certicom cryptology applications and the Paratek antenna technology that is used in phones such as the Z30.

“Combining all these assets into a single business unit led by Sandeep will create operational synergies and new revenue streams, furthering our turnaround strategy,” Chen said in the statement.

Chennakeshu, a 25-year veteran of the wireless, electronics and semiconductor industry, has 73 patents to his name and has been engaged in research, product development, and the creating and licensing of intellectual property, according to BlackBerry’s statement. He previously served as president of Ericsson Mobile Platforms and as the head of technology at Sony-Ericsson.

BlackBerry stock has risen more than a third this year on hopes that Chen might pull off a turnaround by taking the company back to its roots. BlackBerry, once a favorite among corporate and government users for its security and productivity features, both on its enterprise software and on its qwerty keypad handsets, saw its fortunes erode as Apple Inc’s iPhones, and smartphones from the likes of Samsung, captured consumers' imagination worldwide.

“It’s very clear that they are focusing a lot more on enterprises and high productivity consumers,” said Jessica Kwee, an analyst who tracks the mobile devices market at research firm Canalys.

The new strategy also involves leveraging some of the very assets that have now been brought together under BTS. This includes, QNX and software for internet-of-things, Kwee said: “So, phone is not the entire picture that you can judge BlackBerry with ... everything is coming into play now.”

Hardware and services have basically switched places as the dominant contributor to the company's revenues. Hardware now accounts for only 39 percent of sales compared to 71 percent a year earlier, while services now bring in 54 percent of revenues from 26 percent a year earlier. Most of the rest is software sales.

However, BlackBerry continues to release new handsets, including the Z3, which has gained popularity in markets such as Indonesia and India, and the higher-end BlackBerry Passport and BlackBerry Classic are expected later this year. The Passport will have both a large qwerty keypad and a square 4.5-inch touchscreen.

The company saw its handset shipments rise in the three months ended June 30, according to market research firm IDC.

“BlackBerry saw improvement within one of its key markets, Asia/Pacific, as well as some gains among enterprise users within North America and Western Europe,” despite shipments having fallen 78 percent in terms of annual comparison, IDC said in a statement on Aug. 14.

BlackBerry follows a March-to-February fiscal year. During the calendar second quarter that ended June 30, it shipped 1.5 million handsets, a 15 percent gain compared to the three months ended March 31, IDC said.

Canalys’s estimates, which also show an increase in shipments, put the June quarter number at close to 1.7 million handsets compared to 1.4 million in the three months ended March.

On the chances of a successful turnaround, Kwee added: “It’s very early to say ... I think what they have is a solid strategy, a clear strategy going forward, but it’s a tough market so anything can happen.”