BlackBerry: On Knife Edge

We have been tracking BlackBerry’s performance since years now and it is one of the companies with a great amount of potential but slipping away quietly with slow steps towards a massive turnaround. We posted last year, highlighting the Canadian fiscal second quarter performance with recommendations that BlackBerry should pivot towards becoming a horizontal platform- software & services company rather than dedicating billions of dollars of resources towards hardware. Its important to be in mobility space but one can still generate billions in revenues and profits by focusing more on higher margins, highly scalable software and services rather than hardware. e.g. Google. There can be only one Apple.

Looking at BlackBerry’s fiscal forth quarter (Dec-Feb) performance it is clear we can see the steps in a downward trajectory rather than building up.



  • The profitability is the biggest issue here, turnaround still multiple quarters away to see positive operating margins, though company recorded a tiny positive net income (a silver lining)
  • Lower scale due to declining demand for the BlackBerry phones still a huge profit drag
  • Software  & Services contribution to revenues also declining and BlackBerry should allocate more resources to push them un-bundling more from the hardware
  • Software & Services are down from a peak of $3 Billion level to $2 Billion level in just span of 12 months
  • The negative perception and confidence on BlackBerry hardware among customers is hurting the overall software and services effort even more now
  • BlackBerry needs to relegate the hardware business to a niche status – just launch couple of high profile and premium desirable devices per year
  • BlackBerry as a next step should also think about licensing out its platforms to companies such as Samsung or Huawei which are looking to differentiate and/or break into enterprise or automotive space
  • Thus BlackBerry needs to become more focused towards becoming a horizontal company and have taken some good steps towards achieving the same.
  • However, during the quarter, there were some positives
    • Partnership with Google to support Android for Work
    • Integration of WorkLife & SecuSuite with Samsung KNOX
    • Acquired Securesmart to enhance the voice and text encryption to target operator businesses which will be first rolled out by Vodafone Germany in coming quarters
    • At MWC announced, a cross-platform BlackBerry Experience Suite bringing portfolio of security, productivity, communication and collaboration tools to iOS, Android & Windows