The company has transitioned from a cellphones to cybersecurity player

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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The company has transitioned from a cellphones to cybersecurity player

Research In Motion (RIM), the company behind the well-acclaimed Blackberry mobile phones launched a pager device way back in 1999. It was called as the Blackberry Handheld.

The company’s rise to glory was not just the keyboard-totting, QWERTY, smartphones that stood out, but its advanced security capabilities and applications such as Blackberry Messenger (BBM) were also extremely popular.

At its peak in September 2011, there were 85 million BlackBerry subscribers worldwide.

And since then, it has seen it all — the rise, the fall, and the end.

In January this year, the phone that everyone once wanted to own, got disconnected. The Canadian company pulled the plug on its device business, its OS, email, and messaging services.

The end is another beginning.

Cybersecurity: BlackBerry’s new frontier

In November 2018, BlackBerry announced the acquisition of AI-based cybersecurity company Cylance for $1.4 billion. It was BlackBerry’s largest acquisition ever.

Cylance applies artificial intelligence (AI) to cybersecurity, replacing legacy antivirus software with preventative solutions and services that protect the endpoints—and businesses.

Today BlackBerry provides intelligent security software and services to enterprises and governments around the world. The company secures more than 500 million endpoints including 215 million vehicles.

David Wiseman, Vice President Secure Communications, BlackBerry writes that “NATO selected its high-security voice and messaging platform for its iOS and Android devices. BlackBerry’s SecuSUITE is deployed to encrypt the conversations of NATO’s technology and cyber leaders wherever they communicate – in the workplace, at home, or travelling abroad.  SecuSUITE also protects numerous countries against electronic eavesdropping whether the comms is unclassified, Top Secret, or some level in-between.”

BlackBerry has also deployed resources helping Ukraine since early in the conflict. Read this article by TG daily, “BlackBerry’s Work in Ukraine: Doing Good Pays Off.”

According to Seeking Alpha, a crowd-sourced content service for financial markets,  “while facing a rocky revenue picture, BlackBerry has demonstrated several quarters of positive cash flow. Additionally, BlackBerry’s debt-to-assets position is sustainable and its total addressable market for its services is understood to be relatively large; these new business lines also operate at robust gross margins. The short-term picture appears difficult owing to chip disruptions affecting the embedded device category as well as the macroeconomic picture overall.”

The turnaround CEO

BlackBerry has long been a brand that people around the world still have a strong emotional connection to.

“Chances are, we are more a part of your life today than we ever were as a handset company, though you may not even realize it. That suits us just fine,” writes John Chen, Executive Chairman of the Board and Chief Executive Officer of BlackBerry.

Chen has been called by many as the “turnaround artist” who created a strategy by altering the course of the company to focus on software and security. And it is working.

While the Waterloo, Ontario-based company lost the smartphone war to Apple and Google, can it retain its lost glory in the cyber space, where it faces intense competition from several well-established players?

According to Blackberry’s 2022 annual report, gross profit margins are healthy across its different segments viz. 59.3% for cybersecurity, 83.1% for IoT, and 63.5% for licensing and other services.

“In the long-term, embedded devices and the internet-of-things (IoT) should continue to grow materially – and BlackBerry appears well-positioned to be a leading player in this market, ” says the report from Seeking Alpha.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members