Telecoms

BlackBerry sharpens focus

Johannesburg, 18 Dec 2014
Read time 4min 30sec
BlackBerry had 0.5% of the market at the end of the second quarter, the IDC says. Photograph by Reuters.
BlackBerry had 0.5% of the market at the end of the second quarter, the IDC says. Photograph by Reuters.

As embattled BlackBerry continues its fight to re-establish itself as a force in the market, it has unveiled a new smartphone that harks back to the qwerty keyboard and launched an enterprise mobility management solution.

BlackBerry's unveilings yesterday come just a year after it went through a radical change, streamlining the company by cutting 4 500 jobs and saying it was shifting its focus to the enterprise and away from consumers; sparking commentary that this was the end of BlackBerry as people know it.

Yesterday, the Canadian device maker - which has been suffering declining market share and dropping revenue - unveiled the new Classic smartphone, and said improved mobility and security solutions will play a pivotal role in its bid to gain traction in the business sector - a move analysts note will be crucial to its prospects.

Swift Consulting CEO and tech blogger Liron Segev says BlackBerry's renewed focus on its business roots will be a key feature of CEO John Chen's tenure at its helm. "They are not in it to fight for the number one spot, but their aggressive approach to the business world is smart because people tend to use their devices for personal reasons anyway."

Reverting to the signature design and qwerty keyboard in the Classic smartphone also means customer feedback is being taken seriously, according to Segev. "There's an acknowledgement that people aren't just chasing the hype anymore. They want good battery life, good security and a device that is easy to work with and that is what they are trying to do."

Tough times

BlackBerry's stock gained 4.94% yesterday on the back of the news, to end the day at $9.98, giving it a market capitalisation of $5 billion. However, the stock is far from its all-time high of $230.52, a figure it hit back in its heyday in mid-2007.

ICT veteran Adrian Schofield notes BlackBerry's struggles will be compounded if it does not grab the market's attention in the short- to medium-term. "We have seen so many big names fall because they essentially missed a step and could not catch it up. IBM and the PC is a classic example - they missed opportunities and suddenly they are no longer in business for making they device for which it was once the go-to brand".

The Toronto-based company, which will report third quarter results tomorrow, has been seeing declining revenue, as its top line came in at $916 million - down from the $966 million it reported in the first quarter.

BlackBerry also made an operating loss of $198 million, against the previous quarter's $20 million profit. For the same quarter in the previous year, it made a $1.4 billion loss off revenue of $1.6 billion. The company, which has 91 million monthly active BlackBerry Messenger users - a gain from 85 million in the previous quarter - ended the period with cash and investments of $3.1 billion.

However, BlackBerry only shipped 2.4 million devices during the quarter. Despite this, CEO John Chen says the quarter saw "solid" performance against its key metrics. He is confident the company will return to breakeven cash flow by the end of the 2015 financial year, and notes its workforce restructuring is now complete.

"We are focusing on revenue growth with judicious investments to further our leadership position in enterprise mobility and security," said Chen, noting the company aimed to become profitable again in the 2016 financial year.

BlackBerry had 0.5% of the market at the end of the second quarter, according to the IDC. It notes the company ranks fourth behind Android, iOS and Microsoft when it comes to device popularity. Its market share has declined 78% year-on-year.

Segev notes, while the company's devices are lagging behind in the consumer market, its strategy to appeal to the security-conscious enterprise market could pay off.

Expanding EMM

Shortly after unveiling the Classic, BlackBerry said it will push its Secure Productivity bundle (also announced yesterday) designed for organisations using BlackBerry Enterprise Service 10 or BES12 - a cross-platform enterprise mobility management (EMM) solution aiming to protect mission-critical business data.

BlackBerry adds its newly-unveiled Enterprise Communicator solution extends secure communications and mobile collaboration to iOS, Android and BlackBerry devices enabling employees to be "more productive on the go".

Billy Ho, VP of enterprise product and value added solutions at BlackBerry, says the company's growing portfolio of EMM solutions seeks to gain relevance by tackling daily security and productivity challenges in business.

According to Schofield, BlackBerry is under pressure to perform well in this segment. "If there is a perception that their models are bringing risk to the enterprise, then there will be even less reason for them to be able to regain some market share".

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