BlackBerry moves away from smartphones – more focus on software and security

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It’s official: BlackBerry is no longer committed to making its own hardware.

The announcement was made – or rather, it was mentioned as an aside – in BlackBerry’s most recent earnings report.  “The company plans to end all internal hardware development and will outsource that function to partners,” said John Chen, BlackBerry CEO, in a statement. “This allows us to reduce capital requirements and enhance return on invested capital.”

“We are reaching an inflection point with our strategy,” Chen added. “Our financial foundation is strong, and our pivot to software is taking hold.”

The company’s move towards software, security and enterprise mobility management (EMM) has been coming and inferred in recent announcements; not least the partnership struck up earlier this month with mobile threat management platform provider Zimperium to give enterprise and government customers greater security for iOS and Android devices.

In July, BlackBerry had to clarify its strategy around its smartphone portfolio after issuing a missive which was later claimed as being misinterpreted by media, fans, and customers alike. Marty Beard, BlackBerry chief operating officer, said that the company was still committed to its traditional keyboard as well as the BB10 platform.

Yet plenty of signs were there that BlackBerry had run its course in the hardware market. Last year, BlackBerry and Google announced a partnership designed towards protecting Android enterprise mobile devices. At the time, Nelson Smith, a contributor for The Motley Fool and a BB shareholder, said that while the company had a future in software and security, it was “doomed to fail in the smartphone space.”

With regard to being enterprise focused, this was key. As far back as 2014, when the firm released its square-shaped Passport phone, the device’s outstanding features – the 4.5 inch screen, the greater 60 characters per line screen limit – made it evident that the phone was all work and no play.

When it comes to EMM, BlackBerry has been on much surer ground in recent times, leaping into the winners’ enclosure in Gartner’s most recent EMM Magic Quadrant. Part of this was evidently down to the company’s acquisition of Good Technology, previously a leader in the space on its own, for $425 million this time last year.

Speaking to analysts, as transcribed by Seeking Alpha, Chen made it clear – as he has done throughout most of his tenure as CEO – that his strategy when taking over was to tidy up the balance sheets, invest in new technologies, such as IoT and connected cars, and create new business models through licensing BlackBerry’s technology and intellectual property.

“Overall, we believe this is a very viable model as we are getting lots of interest around the world for bringing BlackBerry brand device to market with the security and user experience we all know we are known for,” said Chen.

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hnrindani
29 Sep 2016, 12:22 p.m.

I will say this as a wise move. Lately blackberry is seen loosing the market share when it comes to smartphones, which is one of the major reasons of this move.

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