Blackberry’s attempts to turn around years of financial loss by rebranding itself as a software company has shown early signs of success according to its latest quarterly report however industry analysts remain doubtful over the long-term viability of the new direction.
The Canadian phone firm has been struggling to compete in recent years and has recorded loses of around $1.2 billion a quarter. However rebranding efforts and a focus on recapturing the business to business market where they first made their name has resulted in profitability for the first time in years.
Their recent financial quarterly results reported software revenue increases of 150 per cent to $137 million over the previous quarter. The figures represent a systemic shift in direction for the company as it pushed forward with confidence in its renewed focus on secure b2b software communication solutions.
CEO, John Chen, used the momentum to announce that the company would divert $100-200 million in hardware spending into the software arm of the business. He highlighted the growth of Blackberry’s coding efforts and drew attention to the revival of the BES- the programme which allows BlackBerry devices to access corporate messaging and collaboration software such as Microsoft Exchange
Chen’s announcements illustrate the company’s shift in marketing strategy too, Blackberry’s failings in smartphone manufacturing has left it with a market share of less than 1% and so the focus on software, enterprise and security made sense.
Ian Maude, head of digital media practice at Analysis firm Enders, points out that Blackberry was at its most “successful when it marketed itself to businesses” and that by “going back to their routes, they’re doing what they do best.”
The damage the brand has sustained in hardware is likely permanent according to Maude who says “they are not in a league anymore” and believes that “investing in secure communications and appliances around that is a logical step” for the company.
However Apple’s success has grown exponentially in the time Blackberry has suffered, including in their security. Blackberry is rebranding itself around secure communications but more and more businesses are using iphones for enterprise because the perception of their security is good. “Email on iOS systems is secure enough for me and most business” says Maude.
Nick Lane, chief insight analyst, at Mobile Squared shares Maude’s reservations about the longevity of Blackberry’s new strategy because “Android and iOS are just as prevalent in the enterprise space, so the company still faces similar hurdles.”
Success, according to Lane, will only come if Blackberry is more “aggressive with its marketing strategy and highlights potential weaknesses in iOS and Android software that it can overcome.”
Blackberry has attempted to strengthen this push with acquisitions of security software firms and the introduction of the Blackberry Center for High Assurance Computing Excellence (CHACE), a research and development initiative in computer security.