BlackBerry Still Standing, but for How Long?

Carl Weinschenk
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One of the longest running dramas in the telecommunications and IT industries is the saga of BlackBerry. Once the king, the company has long been struggling to reinvent itself and survive.

The latest twist is that BlackBerry is becoming an Internet of Things (IoT) enabler. ITWorld reports that the company used the Consumer Electronics Show (CES) last week in Las Vegas to fold its Project Ion IoT into the new BlackBerry IOT Platform.

The platform will be available in April. Two things are at work. On one level, the IoT has no overall and systematic management and organizing structure. That’s a clear threat to the efficacy and even safety of the IoT. On the other, BlackBerry’s roots are in the enterprise – where the IoT likely will first concentrate – and its operating system is well suited to the task. This means that it could help fill that vital role and, perhaps, thrive. Writes Stephen Lawson:

The BlackBerry IoT Platform combines QNX embedded software with BlackBerry’s secure network infrastructure and device lifecycle management. At its heart is what the company calls an efficient, scalable messaging system that can deliver highly responsive performance, BlackBerry says. That system serves as a message bus for other components including instantaneous data indexing and storage for real-time intelligence, analytics for data visualization and detailed permissions for validating every action, message and piece of data.


The Trefis Team, which contributes on an ongoing basis to Forbes, agrees that BlackBerry brings strengths to the IoT:

We believe that BlackBerry’s strategy of beginning with the automotive and industrial sector is a step in the right direction, given that the company has strong credibility with enterprise customers. Additionally, businesses are likely to buy into the IoT trend sooner than customers, given the benefits of greater control, efficiency, data logging and analytics that the solution could provide. BlackBerry’s solid reputation for security could also provide a competitive advantage as security has been a concern in the IoT market, since the connectivity could give hackers opportunities to break into devices that have so far been isolated from the internet.

The move seems like a good one for BlackBerry. However, the common wisdom for the firm – that it is successfully reinventing itself by slowly giving up on devices and focusing on its core strengths – is not universally shared. Writing at Seeking Alpha, Andreas Hopf suggests that BlackBerry is far from safe waters and implies that those assuming the danger has passed are wrong. Hopf’s sense is that the moves since turnaround artist John Chen replaced Thorsten Heins as CEO are just delaying the inevitable.

BlackBerry ClassicThe turnaround, on which many long-term investors pin their hopes, remains, after four full quarters under CEO John Chen, elusive. BlackBerry is still faced with dramatically shrinking hard and software revenues, while new monetization concepts are not appearing to provide the much needed income streams to keep the cash balance - upheld by a $1.25 billion loan, asset sales, lay-offs and tax-benefit collections - at current levels for much longer. The business is contracting further instead, and most substantial cost-cutting options have already been executed to the point of endangering the company's operability for growth. It is not unlikely that Chen already contemplates divestment of BlackBerry's hardware business for lack of other options.

All may not be lost. American Banker reports that the Classic BlackBerry which, as the name implies, is a throwback device – sold out before its official launch last month. Other positive news is a deal with AT&T to sell its Passport smartphone in the U.S. and the launch of a PayPal app. The downside of the story is that banks still are discontinuing or abandoning BlackBerry apps.

There are two extremes to the future of BlackBerry. Hopf’s view – that the game essentially is over – is one. The other, which is held by those with a sentimental attachment to the days of the “CrackBerry” and who generally root for the underdog, is that the company has survived a near-death experience. In other words, it is still too early to say if the drama is a tragedy or a feel good play in which everyone lives happily ever after.

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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