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» » » » BlackBerry may have to shrink its way to success
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BlackBerry
“The last time device shipments and revenues were at current levels (way back in 2007) cost of sales and overall operating expenses were a fraction of what they are now,” Dawson writes. “Even cutting operating expenses by 50% by 2015 won’t be enough at this rate. The company has to find other sources of revenue, and it simply hasn’t shown what those are.”
Dawson thinks that new CEO Chen has no time to waste in articulating his strategy for moving BlackBerry forward and that the company’s scheduled December 20th earnings report is absolutely crucial. At that time, Chen will need to spell out exactly how he plans to either revive the company’s flagging device sales or put it out of its misery while also spelling out just how big or small the company will need to be so it can return to profitability.
“The only way BlackBerry can survive, therefore, is if it can dramatically cut costs to give it enough breathing room to allow these very small, nascent product lines to generate significant revenue,” Dawson concludes. “I believe that’s why Fairfax wanted to take it private — that’s an ugly kind of transition that you really don’t want to be doing in public.”

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