The sheer size of China's mobile market inspired BlackBerry to hitch its wagon to a star. The handset maker now eyes an expansion in the world's largest smartphone market through partnerships with Xiaomi and Lenovo Group, reported the Jakarta Globe.

BlackBerry CEO John Chen said he met with Xiaomi's CEO Lei Jun and Lenovo's head Yang Yuanqing during the Asia-Pacific Economic Cooperation CEO Summit in Beijing. Aside from the two, Chen also made contact with Cher Wang, chairwoman of Taoyuan, Taiwan-based HTC.

These meetings embody BlackBerry's efforts to make its way back to profitability after things had gone from bad to worse when the declining shipments plunged the company into the red, posting net losses in each of the past three years.

The company saw an opportunity for agreements on technology licensing, distribution or manufacturing as demand for security, encryption and privacy—features that BlackBerry claims to be its strong suit—are currently on the rise in China, said Chen in an interview.

To make it big in China, it makes sense to build partnerships with local companies, indicated Chen. BlackBerry has not concentrated on this market, which it sees as huge but highly competitive. Chen said that now is the right time to look at growth prospects in the country.

Chen took over about a year ago to create a major shakeup and make up for the huge losses BlackBerry suffered due to decline in shipments, with its market share divided between Apple and Samsung.

Chen's approach targeted business customers by bringing back phones with signature physical keyboards and offering more software-based services. In addition, he outsourced some production and sold property.

The work has put the Canada-based handset maker on track for break-even cash flow by the end of this fiscal year. Chen reiterated that BlackBerry will start to make profit in 2015.

BlackBerry's shares rose 5.3 per cent to close at $11.09 on Monday on news that Chen has been in talks with Xiaomi and Lenovo. About 19.2 million smartphones running BlackBerry OS were shipped in 2013—a glaring difference compared to 51.1 million units shipped in 2011, according to data compiled by Bloomberg.

In September, BlackBerry released its Passport smartphone featuring a large square touch screen and new QWERTY touch-enabled keyboard. Designed for productivity-driven business professionals who write e-mails, study spreadsheets and read documents on their phones, the Passport sold 200,000 in its debut.

A new concept for devices set to debut next year, and another version of the Passport are already in the works, said Chen. The company will reveal one at the Mobile World Congress in March.

Bloomberg showed that BlackBerry got 16 per cent of its sales from the Asia-Pacific region compared with 19 per cent from the U.S. during the fiscal year that ended in March.

Chen said that out of the 40 million BlackBerry users worldwide, there are only a few hundred thousand of them in China. With the company's return to firmer financial footing, the company now seeks growth in the Chinese market.

Chen pointed out that his talks in China do not involve a sale, saying that he intends to operate BlackBerry as an independent company. He, however, declined to provide details about his China conversations, with Xiaomi and Lenovo both remaining silent.

The CEO said that he is exploring the right approach to China, given that the market is not easily penetrated, and getting deals, if any, is going to take a while.

It is way early to be looking for any results, added Chen.

By: DocMemory
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