Is BlackBerry ripe for a comeback?

The once-dominant phone maker bets big on security to bring back the glory days.

“What do we do well?” was the question BlackBerry chief executive John Chen asked when he took the reins of the Canadian communication company last November. That question has also been on the lips of BlackBerry watchers ever since its spectacular fall from grace.

With the influx of iPhone and Android smartphones, times have been tough for the once iconic business phone vendor as enterprise users deserted BlackBerry’s handsets and the company struggled to find a new direction under former chief executive Thorsten Heins. Last week’s news of an enterprise tie-up between Apple and IBM was hailed by many as the final nail in its coffin.

But if you think John Chen has given up on BlackBerry, think again. Speaking at the company’s Security Summit in New York this week, Chen and his executive team laid out a roadmap back to profitability. In Chen’s view, BlackBerry’s future lies in its roots of providing secure communications for large organisations.

“It became obvious to us that security, productivity and collaboration have to be it,” Chen said. “This is not to say we are not interested in the consumer, but we have to anchor ourselves around the enterprise.” It was a clear move on Chen’s part to distance himself from his predecessor and products like the ill-fated BlackBerry Playbook.

The security selling point 

The cornerstone of Chen’s New York keynote was the acquisition of German voice security company Secusmart, marking an early step in BlackBerry’s renewed focus on enterprise security concerns.

Secusmart chief executive Hans-Christoph Quelle said the acquisition “fits perfectly” as his company’s technology has been increasingly incorporated into BlackBerry devices in recent years. “We are not strangers, having worked together since 2009,” Dr Quelle said.

Secusmart’s key selling point has been its adoption by NATO and European government agencies. A series of events including the Snowden revelations on the US bugging of Angela Merkel, the Russian FSB leaking intercepted US state department conversations and the release of Ukrainian separatist conversations after the shooting down of MH17 have focused the European view of security on voice communications.

Along with the acquisition of Secusmart, BlackBerry will also be launching a new enterprise service in November; the new Passport handset in December; and a range of security applications including BlackBerry Guardian, a new service that will scan Android apps for malicious software.

BlackBerry’s executives were at pains to emphasise their products aren’t focused on any single smartphone operating system and are not dependent on customers buying their smartphones to get the maximum security benefits.

“We will provide the best level of security possible to as many target devices out there as possible,” said Dan Dodge, who heads BlackBerry’s QNX embedded devices division.

The QNX factor 

In the longer term, BlackBerry sees the QNX division as being one of the major drivers of future revenue as the Internet of Things is rolled out across industries.

QNX was acquired by BlackBerry in 2010 to broaden the communication company’s product range. Now it is one of the pillars of the company’s future, as Chen and his team see that connected devices will need secure and reliable software.

While QNX is best known for its smartcar operating system, which underpins Apple’s CarPlay system being rolled out at BMW, as well as its own system deployed in Audis. However the company’s products also include industrial applications ranging from wind turbines to manufacturing plants.

Despite BlackBerry’s optimistic announcements in New York, the company still faces challenges in the marketplace. The Ford Motor Company announced earlier this week it will drop BlackBerry for its employees by the end of the year and replace them with iPhones.

Meanwhile, Chen was dismissive about Apple’s and IBM’s moves into BlackBerry’s enterprise markets. “What we do and what they do is completely different,” he said.

The focus for Chen is to differentiate BlackBerry and play on its strengths, particularly the four markets it calls “regulated industries” -- government, healthcare and the financial and energy sectors -- which the company claims make up half of total enterprise IT spending.

Whether this strategy is enough to get BlackBerry back on track remains to be seen but Chen says this is where he sees the company’s future: “This is why we are so focused on enterprise and so focused on these pillars.”

For BlackBerry, the emphasis on enterprise communications is a step back to the profitable past. It may well be successful as businesses become more security-conscious in a post-Snowden world.

Paul Wallbank travelled to the BlackBerry Security Summit in New York as a guest of the company.

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