BlackBerry Phone Sales Down – Which May Not Be Too Big a Deal

Carl Weinschenk
Slide Show

Embracing the Mobile Development Trends of 2016

As it edges away from oblivion, BlackBerry has simultaneously edged away from being a device company. While smartphones are important to its image, they are increasingly being deemphasized as software becomes the company’s major product – and sole realistic route to survival.

So the news that BlackBerry sold only 500,000 devices during its first fiscal quarter – down from 600,000 and 700,000 in the prior two quarters – is bad news that should be taken with a grain of salt. CNET painted what is probably an accurate picture of how CEO John Chen feels:

Chen may not be sweating the phone business too much. Its poor performance comes amid a multiyear push by BlackBerry to turn itself into a provider of business services and software. Traditionally, BlackBerry generated a bulk of its revenue through phones, but this quarter, 39 percent of its revenue came from software and services. Phones accounted for 36 percent of revenue.


Any reduction in sales is bad news. In this context, however, the more important thing is how the replacement business is progressing. The news is more upbeat on that front: That grew 131 percent compared to a year ago and almost 75 percent of its software revenue is from recurring sales.

Google Pays for Vulnerability Insights

It’s interesting that Google didn't put Android on its security rewards program until a year ago. The program, which was established in 2010, rewards researchers who report vulnerabilities. The program’s Android activity is good. Google has received more than 250 reports focused on Android and has paid $550,000 to 82 researchers, according to eweek.

Smart people can make a good deal of money in this manner: Quan To, security program manager at Google, says that Peter Pi, the top researcher for Android vulnerabilities, over the first year reported 26 vulnerabilities. He was awarded $75,750 overall.

One of the best known Android vulnerability disclosures is related to the Stagefright media library. Joshua Drake from Zimperium received more than $50,000 for his part in disclosure of the vulnerability.

CS&L to Acquire Tower Cloud

Dark fiber and tower company Communications Sales & Leasing (CS&L) is acquiring Tower Cloud for $230 million, according to Light Reading. The driver of CS&L’s interest is the “growing demand for small cell and dark fiber services and the arrival of 5G technology.”

CS&L current has about 3.9 million fiber strand miles, 85 wireless towers, and other assets in the United States and Mexico. The deal, if completed, would add about 90,000 fiber standards miles in the southeastern U.S. to its inventory.

The signs are good for the company and the sector overall. Verizon and Sprint are planning to “densify” their networks via small cell and other technologies. The takeaway is that traffic is growing and companies with the tools to accommodate it are well positioned.

The 411 on OTT

Over-the-top (OTT) video is important both as a business itself and for its impact on other services. It’s a simple equation: As more network resources are dominated by OTT, the less there are for other services, including those used by businesses.

Limelight Networks this week released its semi-annual report, "The State of Online Video." Telco Transformation offered highlights: Consumers are watching more OTT video as the percentage watching one to two hours per week declines and the percentage watching more than 10 hours increases. More people are subscribing to a higher number of services.

The report also found that quality of experience (QoE) is becoming more important. It is interesting that a higher percentage of people responded that they will never “cut the cord” than said that they would in December, 2015.

The study found that price remains the most important issue in becoming an OTT user. Interest in a la carte video is growing. Millennials are the most likely to view OTT. Finally, PCs are the most common OTT viewing device.

5G Spectrum: The FCC Aims High

One of the key questions about the way in which 5G will be deployed is where it will operate. The answer – or at least what the Federal Communications Commission (FCC) wants it to be – became a bit clearer this week when Chairman Tom Wheeler released a New Spectrum Frontiers proposal for the expansion of license blocks to chunks of at least 200 MHz in the higher bands. The proposal includes a "balanced solution" for spectrum sharing between the satellite and mobile industries.

The proposal was scheduled for circulation among the other commissioners late this week and to be voted upon on July 14. At this point, no country has opened high-band spectrum for 5G.

Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at cweinsch@optonline.net and via twitter at @DailyMusicBrk.

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