New Blackberry CEO Won't Ditch The Handset Business

When Thorsten Heins was appointed CEO people wondered who he was and where Blackberry BBRY found him.

Heins was seen as a puppet for “departing” co-CEOs Jim Balsillie and Mike Lazaridis and not expected to do much of anything to turn the company around. They were right. Monday, the company made a series of announcements that, once again, shocked investors.

First, Thorsten Heins is out. Nobody is sure if he was ever actually in but he’s no longer the CEO. That might have sent the stock higher but what was more surprising was the announcement that it was abandoning all takeover bids and accepting a $1 billion investment from a group of investors led by Fairfax Financial.

As part of the deal, former Sybase CEO John Chen will serve as Blackberry’s interim CEO until a permanent replacement is found.

“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors,” current BlackBerry chair Barbara Stymiest said in a statement.

Related: Market Wrap: New Highs for Airlines, Boeing Boost Stocks

But the announcements didn’t stop there. No fanfare was made about it but new CEO John Chen will not get rid of the company’s handset business.

John Chen isn’t a name that most investors know but his resume is solid. He serves on the boards of Wells Fargo WFC and Disney DIS and as the CEO of Sybase starting in 1998, he took a company that was nearly bankrupt (sound familiar?) and 13 years later, sold it to SAP for $5.8 billion—more than 15 times the company’s value when he took over.

He said of his new appointment, “I am pleased to join a company with as much potential as BlackBerry. BlackBerry is an iconic brand with enormous potential -- but it's going to take time, discipline and tough decisions to reclaim our success.”

But what about the handset business? It wasn’t long ago that Blackberry took a $1 billion write down on what was supposed to be its return to glory in the handset market but needle in a haystack comes to mind for anybody searching for an industry expert who believes that Blackberry has any future in the mobile handset market.

What happens after Chen takes over and those “tough decisions” is anybody’s guess but admitting defeat in the handset business might be a great first step.

Disclosure: At the time of this writing, Tim Parker had no position in the companies mentioned.