BlackBerry COO Kristian Tear w/ CrackBerry Kevin
Following the recent announcement that BlackBerry 10 will be fully unveiled on January 30th, 2013, I made the trip to Waterloo last week to sit down with BlackBerry's new Chief Operating Officer, Kristian Tear. Normally I would say Research In Motion's new COO, but when Kristian handed me his business card there was no sign of a RIM logo on it... it was BlackBerry all the way. As we were told in our interview with BlackBerry's new CMO, Frank Boulben, BlackBerry is the megabrand and the RIM name will be taking a back seat to that, apparently right down to the new business cards.
While we've now spoken to BlackBerry's CEO and CMO on multiple occassions, this was our first chance to sit down and talk to Kristian, who is still relatively new at three months on the job. Though he was announced at the same time as Frank Boulben, Kristian had to sit on the sidelines for a while due to waiting agreements with his former employer. When he officially started he hit the ground
running flying, immediately joining in with RIM's top execs on their global BlackBerry 10 carrier roadshow. And from there, all of his current efforts are focused on the launch of BlackBerry 10.
Like CEO Thorsten Heins, Kristian is TALL, easy to speak to and even dropped in my favorite line, "Make No Mistake" during the interview. Towards the end of our time together we also discovered that Kristian speaks Swedish (he's a Stockholm boy), as does Mobile Nations' Marcus Adolfsson who joined me on this trip. Once the two of them got going in their native tongues I have no idea what was discussed (it sounded exciting though), but you can read on for our 10 Questions -- in English -- with BlackBerry's new COO!
Q1. COO. Chief Operating Officer. I think our readers would love to know, in your own words, what that role embodies at BlackBerry... What are your main responsibilities and duties?
Kristian: My responsibilities are basically end-to-end. Sales, product management, hardware development, software development, technology, manufacturing, the supply chain -it's basically everything except for marketing which is with Frank Boulben and Enterprise Business which is with Robin Bienfait. Overall, making sure we get the products developed, distributed, sold and repaired, should they ever break -- that's my responsibility as a whole.
And that's essentially a new structure at RIM. Previously all of those things were spread across several COO positions and Thorsten decided to make it one structure, with only one COO, which I think is the right thing to do as it provides me the sole possibility of control, both on the input and the output.
Q2. So that answer leads us directly into the next one. You took the position formerly held by BlackBerry's CEO, Thorsten Heins. I'm not sure if that makes stepping into the role a little easier, or maybe more difficult?! How have the first few months gone?
Kristian: I think it has made it easier. First of all, Thorsten's a great guy and obviously he brought me here and I wanted to work for him as well so it was very mutual. I liked what he stood for and he obviously liked what I stood for as well, so we were a good match and he's an absolutely great leader. He wants to change the company and was already into the transformation putting a lot of changes in place before I had the opportunity to join.
Q3. Since coming on board, have you been making any of your own changes within the company, or is the focus completely on ramping up for the launch of BlackBerry 10?
Kristian: My focus is on BlackBerry 10, make no mistake about that. Everyone's focus is on BB10 right now. Our operational process and structure is fine right now and we have a great team already in place. I have the COO responsibility and I know execution is with me so that's what we're focusing on. I have done turn-arounds before, Thorsten has done turn-arounds before, and so I think we all know what it requires. Like I said, many changes have already been initiated and there is a good plan in place.
It's a plan for success -- no doubt about that -- and I am now making sure that we can follow that plan, make sure we have numbers on everything that's going to be delivered and when it will be delivered and we have diligent follow up on that plan. There are a lot of details as this is going to be a global launch. The war rooms are in place where we meet and discuss the details.
Q4. We have a date now, January 30th, 2013, and it's going to be a global BlackBerry 10 launch. How's that going to work? It doesn't sound like it's going to be just a simple one-stage launch event, so what should we expect?
Kristian: Yes, we have an announcement date set and as we mentioned, it's going to be a global launch. On that date, we'll have a lot more to tell. Everybody has been asking, when is the product coming? When can I buy it? And we've said, not too late after the announcement date and that is something we have to stick to. It's obviously something we NEED to do. For the carriers, a lot of them are launching it in larger markets and as you know, they have now received their lab devices and are now testing it. Yes, we have that (availability) date and we're really looking forward to share what it is.
Everybody has been working so hard for a long long time. I had the kind of fortune in joining in the final quarter where a lot of work has already been done by others already, but it's going to be a big day when we can announce it to the world. You know -- you've had the benefit of testing it.
Q5. Our CrackBerry community is excited for BlackBerry 10. How about the carriers?
Kristian: Everybody so far is every excited. On the BlackBerry 10 tour, I have never been to so many positive carrier meetings in my life. All of them are excited for the Hub, Peek and BlackBerry Balance. Normally, when you try to sell to them they're all very stone faced. With BlackBerry 10 though, you can see their eyes light up when we show them the keyboard and peek. Overall we have had really good meetings and it's important that we do get the support of carriers.
We have met with quite a few of Enterprise folks as well and they too are enthusiastic about the products and what they can do. Enterprise as you know is going increasingly BYOD (Bring Your Own Device), bringing more of the consumer element to it and we're making sure BlackBerry 10 has a place there.
Q6. And what in BlackBerry 10 are you most excited for? Are you going full touch or physical keyboard? What's your favorite feature?
Kristian: I was a touchscreen user before and since I came here I've been using the QWERTY keyboards and I'm a big time fan of those now. I do have my BlackBerry 10 full touch device here. I was told I should not to show it to you but it has a fantastic keyboard as well. That of course, has and continues to be one of our strong selling arguments. A lot of those hardcore QWERTY users who have used it, have said it's the first time they have considered leaving a QWERTY device for a full touchscreen. I like both really, but no matter which you choose, we'll be providing the absolute best experience.
As for favorite feature, I like the whole package really. It is cool with Peek, I use that A LOT. As well, to be in the Hub and pull down the calendar... I use that a lot as well. The keyboard... I'm flicking words up and the support for multi-languages is great given I use English and Swedish.
Q7. When it comes to ramping up for a global launch like this one, what are your biggest challenges? What keeps you up at night? Is it supply chain management? Forecasting how much to make? Do players like Apple and Samsung make component procurement more difficult these days?
Kristian: There is a lot of detail in this and we have a good, solid plan. We're working to make it a very successful launch and we've looked into everything you mentioned and more. Supply chain, distribution, addressing carrier needs -- all of it. I've done a lot of launches in my life, and I know what it requires and I have my own kind of checklist of things to walk through. Right now we're having lots of meetings and we bring in my whole team and we use everyone's eyes and ears to ensure every detail is on track and finding out where things can improved if need be.
Our suppliers have been very supportive, we've actually reduced our core number of suppliers but the ones we have and the ones we are working with now are very supportive so there is no issues there. The suppliers, as expected, want to see us succeed so we can continue to do business with them so everything is under control.
Q8. Over the past couple of years we have seen RIM's hardware margins get squeezed -- especially on higher end devices -- to the point where most of RIM's profitability comes from service revenue. We still don't have a clear picture of what RIM's service revenue will look like in a BlackBerry 10 world. Can RIM be profitable on hardware sales alone, and can you give us a clearer understanding of how RIM's service revenues will be impacted, if at all, with BlackBerry 10 devices?
Kristian: We will continue to have service revenues. We have discussions with the carriers on this and how we can evolve but right now as it stands, there have not been any changes there. When we have changes, we'll announce them. We're continuing to deliver value with our services, everyone recognizes that and we have a good security proposition as well. Like everything else, it will change over time but the services revenue is still there and we are working on things that add even more value to the services, I can't say much on those right now but the agreements with carriers and enterprise can be further developed. For example, we recently announced BBM Voice that's an addition to the value of our services. Our team has experience in working with carriers and creating value propositions that deliver profits for us, profits for the them and that are great for customers. It's all about finding the balance in it all to make it good for everyone.
When it comes to hardware, we need to work with cost and efficiency at all times. That's not something we should have just been doing as this transformation process is happening, that's an ongoing process to figure out what is actually value and what do we put into the products that consumers want. You can't put everything in there of course, as that would lead to smaller profit margins but we continue the value-focused approach and build great products. Hardware needs to be profitable.
Q9. Let's shift gears and talk about the transition from manufacturing current BlackBerry 7 phones to BlackBerry 10 devices. Are there challenges doing both at once? What's the thought process on continuing to sell BlackBerry 7 devices after BlackBerry 10 becomes available? And should we expect to see a plethora of BlackBerry 10 devices as we have in the past, or a much more streamlined portfolio?
Kristian: We will continue to produce BBOS as you know, that OS will continue to live for several years to come -- That's on a separate track while BlackBerry 10 is on another track, so there is no conflict in between them both. We want to maintain both. The factories and ramp up is something that I monitor closely and while I can't share the full details, I can say things are looking good right now. We're confident about the systems in place and we keep track of it everyday.
There will be more BlackBerry 10 products coming, and eventually those areas making heavy use of BBOS will be transitioned into BB10 as well, but right now, we're not ready to fully reveal the roadmap for that transition. We have 80 million customers on the BBOS and that's still a good OS. It serves a lot of good purposes in many many countries and we'll continue to serve them as well. We're building those devices on demand, so we don't speculate the level of ordering. That way we don't maintain a high level of inventory. We're continuing to follow up on the supply chain demands as well, so that we know exactly what we're looking at in terms of ordering. Making sure the production lines are lean, effective and efficient at all times.
I think that if you look at the overall global picture everybody is reducing their portfolios, even the carriers. We have a product portfolio roadmap that will come into different price tiers over time. With the roadmap we'll be evaluating it when the time comes to see if it's the right time to announce and release new products.
Q10. In the past, carriers seem to have had a lot of control over design choices and such.. have you all put your foot down when they come up with some crazy stuff they want you to build?
Kristian: We want to work with the carriers, who do at times have a lot of requests and technical requirements but we want to work with them. We often discuss those requirements. If it's a legacy requirement that doesn't deliver any value, why should we make things more complicated then we have to? Sometimes, we cannot agree on that and sometimes we can. The carriers are very knowledgeable to what the consumers and customers want to have so it's good to listen to them but if we only listen to them, we would become an ODM.
We have our own DNA, innovation and we will continue to add that into the mixture. There was a lot of inside research done for BlackBerry 10 before Frank and I joined, on what customers needed and wanted but also a lot of carrier and operator research, plus plenty of input from our technology partners. We took those three and our own innovations and put it all into BlackBerry 10.
Bonus Question: We're obviously excited for the launch of the first BlackBerry 10 phones. But we know this is a mobile computing platform. With Research and Development also falling under the COO function, how do you feel about the QNX platform's capabilities for the long term?
Kristian: In my and Thorsten's first meeting, we spoke a lot about mobile computing. We have a new software platform, a new OS with BlackBerry 10 and the now we have the first two phones but there is a future after that with mobile computing. There are many ways mobile computing can go. I think the nice thing for us is that we do have have all the ingredients for a mobile computing play and also the ambition to get the strong position in mobile computing.
I can't share the exact details with you but we're spending a lot of time on the "next steps" in our plan and it's very exciting. QNX as you know enables us to do things in a very differentiated and unique way and I think that's what the carriers and enterprises actually appreciate because we offer a very distinct proposition, it's a RIM proposition that they understand. There's no ambiguity in what we offer and what we stand for, they know the RIM and BlackBerry services and how we control the systems.
Again, with the ambition of taking it further, we have a lot of enterprise customers interested in mobile computing and they figure how they can reduce their total cost for providing a good mobile infrastructure for their employee's and their customers. PC's are expensive. If everyone is going to get a PC it's going to get expensive. We're looking at ways to reduce those costs and I think we're able to have a good solution for it all.