Blackberry has had a difficult period of adjustment over the last decade. From the heights of the stock price being at 144 USD to where it is now at 4 USD it may seem as though Blackberry has very little to offer investors and that their days as one of the leading technology companies are well behind them. To many they have been completely forgotten as a remnant of the failed blackberry phones which dominated the market in the early and late 2000’s and a company who failed to innovate in line with the introduction of the iphone and similar products. Their business was decimated. However they managed to build something else from their earlier success and diversify away from the mobile market. Since then Blackberry has been transitioning away from a hardware company into a software and enterprise solution company specialising in cybersecurity, endpoint data security, operating systems and enterprise solutions. Operating in industries such as financial services, government, professional services, healthcare, transportation, education and manufacturing manufacturing.
Blackberry’s transition and turnaround can be marked from one specific point of time, their appointment of John S. Chen in 2013. Mr Chen is known for turning around “dead companies” which are unprofitable and lacking direction, as Chen did with Sybase he lead a re-invention strategy which turned Sybase from an unprofitable company into a profitable one, he fixed the balance sheet and managed to increase the value of Sybase from a low $362 million to $5.8 billion in 2010 when it was acquired by SAP. Mr Chen has imitated this same approach and applied it to Blackberry and it has proven to be very effective yet again.
To break it down there are a few key pieces of technology that Blackberry now own which they are using to dominate the market. As they were in the 2000’s they are at the forefront of their given industry and are seeking to take an even more dominant approach. Their key technologies include the QNX systems, Blackberry Workspaces and Cylance as well as their enterprise solutions and services just to name a few. Blackberry has been able to create a whole package of systems and products that are able to meet the needs of all their customers when it comes to end point management and security systems.
Cylance which was acquired by Blackberry in 2019 may be one of the most exciting aspects of their business to date. To put it simply cylance is a cybersecurity solution, now that on itself may not spark any interest but the way cylance tackles cyber security is game changing. Typically when a security system is installed on your computer it looks at past cybersecurity problems and uses that knowledge to identify risk and if there are any malicious programs. Therefore if the program has identified a specific type of trojan virus it will be able to identify it and not run that program. That’s all well and good but then the question arises of what happens when the system encounters a new malicious program that it has never dealt with. Thats where Cylance comes into play; it uses AI and machine learning because as taken from Blackberry’s financial statement “unlike traditional signature-based cybersecurity products, the BlackBerry Cylance solution can predict whether code
that has never been seen before, known in the cybersecurity industry as “zero-day” threats, is malicious and prevent it from running.” This means that clients can now lead a prevention lead approach to cybersecurity instead of a reactionary approach. This technology is groundbreaking and at its inception and will prove very valuable in the years to come. The main competitor to this aspect of Blackberry’s new business is Crowdstrike which is also an exciting company worth looking at. For a comparison, in the medical world this would be equivalent to creating a vaccine for a virus that has not been introduced to the world and having that vaccine already in the systems of the population.
Moving onto Blackberry’s QNX systems which is a program for advanced driver-assistance programs which “provides a software foundation that enables the above functions to deliver advanced driver assistance systems (ADAS) and automated driving applications.” The system is currently in 150 million cars around the world. To get a better understanding of the QNX systems used in the market today have a look at the following chart.
Blackberry is dominating the market of the connected car and as that market continues to grow and expand as more cars being made are connected to outside applications the need for systems like QNX will increase dramatically. To add to this excitement Blackberry has recently teamed up with Amazon Web Services to make connected cars more secure, they have also teamed up with the likes of Damon to create revolutionary motorcycles. It is definitely an exciting time for Blackberry at the moment.
Blackberry may still seem like a troubled company following the sting of the company’s downfall in the early 2010’s however it has proven itself to be a trusted provider in the wider community where all 7 G7 countries use Blackberry solutions. Be it Blackberry AtHoc or other Blackberry has proven to be a trustful and reliable brand that can be relied upon in the most strenuous of conditions when other technologies and solutions could not, this speaks volumes about the continued capabilities of their products. It also has created a strong foothold in government agencies which may lead to very lucrative contracts in the near future.
With Blackberry’s annual report just around the corner (31st March) now is a great time to start thinking about where to place your cash and which stocks are likely to return a good investment. Blackberry definitely seems like a company which has managed to rediscover its potential, and personally speaking that is very exciting to see.