John Chen, who for a decade steered BlackBerry through its transformation from a mobile device maker to a provider of software for cybersecurity and the Internet of Things (IoT), will end his tenure this at the end of this week as the company prepares to split in two next year.

BlackBerry announced Chen’s departure this week, saying he will retirement November 4 will align with the end of his contract.

Richard Lynch, a former executive vice president with Verizon, will become interim CEO and replace Chen as board chairman while BlackBerry looks for a permanent CEO. Lynch came onto the board in February.

Prem Watsa, lead director of BlackBerry’s board, in a statement thanked Chen for the past 10 years, saying “his achievement of saving BlackBerry and repositioning it as a software company with leading cybersecurity and IoT technologies has been remarkable.”

Watsa also said the company needed an interim CEO to ensure stability as it undergoes the upcoming transition until a new chief executive is found.

Mixed Emotions

For his part, Chen in a letter to employees said saddened to be leaving BlackBerry “now that the Company’s future has been stabilized,” but added that in large part most of the objectives he put in place when taking the CEO position in November 2013 had been realized.

“As I look back at everything we have experienced and achieved together the list of best moments is a long one,” he wrote. “We have built a company that is unquestionably innovative, has a clear purpose, is highly disciplined, and operates with integrity.”

Chen took over at a time when the company was “just days away from potential bankruptcy at the time.” BlackBerry several years earlier sold what was among the most popular business mobile phones, complete with its physical QWERTY keypad that made send messages much easier than competing devices.

Its fortunes changed quickly when Apple rolled out the first of its iPhones in 2007, with its touchscreen, apps, and easy navigation. BlackBerry – like Nokia and other mobile phone providers at the time – wasn’t prepared for the response to Apple’s smartphone and couldn’t keep up.

Shift Away from Mobile Phones

Under Chen, the company began to de-emphasize its mobile phones and transition to become a software provider, ditching the last of its devices last year. The new software-focused strategy saved the company from going over the financial cliff, BlackBerry’s stock prices went up and down quarter by quarter but overall didn’t move much during his tenure.

In May, the board of directors unveiled Project Imperium, an initiative to explore the company’s options going forward with an eye toward growing shareholder value. Among the options was slicing one or more of its businesses. In early October, the company announced the plan to separate the cybersecurity and IoT businesses in the first half of 2024.

The plan is to launch a subsidiary IPO for the IoT business, with Chen explaining on Fox Business News last week that the new company will operate independently but that the parent BlackBerry company will own “a major percentage” of that business.

BlackBerry has about 3,200 employees and in late September said that revenue in the second quarter came in at $132 million, down year-over-year from $168 million. The cybersecurity business generated $79 million in revenue, with the IoT unit bringing in $49 million.

The Cylance Deal

The company took a significant step forward in cybersecurity in 2019 when it bought startup Cylance, a company that was aggressively bringing AI into its offerings for endpoints and edge devices, managed detection and response, and unified endpoint management.

Earlier this month BlackBerry unveiled a new generative AI-based cybersecurity assistant that can help security teams and security operations centers (SOCs) with threat analysis and support for organizations that use the vendor’s Cylance AI offerings.

According to Chen, it’s been a couple of challenging years for its cybersecurity business, though business is growing in the connected devices unit.

In IoT, the automotive industry is a major focus, with other industries like healthcare and industrial coming into play. Its QNX embedded operating system and software is a key technology there, as is its IVY in-vehicle software platform, enabling data processing at the edge and cloud-controlled access to data in the vehicle.

BlackBerry claims its software is used in more than 500 million endpoints, including 235 million vehicles, and by 24 of the top 25 electric vehicle automakers. In the interview with Fox Business, Chen said these types of numbers open up possibilities for its software in other sectors, including processors.

“We are very dominant in the auto industry and we try to expand into other industries, into other verticals, like the medical and industrial,” he said. “The whole AI move in the chipsets are getting more powerful. The automotive industry is embedding a lot of the stuff into a single chip and it needs our software to detect any intrusions and any faults that have been created within the chip. We feel really good about our future.”