Are Blackberry Devices A Thing Of The Past?

To say things have looked good for BlackBerry at any point in the last 8 or 9 years is probably putting too fine a point on it.

In recent years, most of the commentary the firm has drawn has centered around wonder at its continued existence given how thoroughly, totally and rapidly the consumer marketplace moved on from their central product.

But, whatever else can be said of BlackBerry since 2007, it cannot be said that they are not one tenacious group of Canadians.

Acquisition — particularly of the firm’s large and valuable cache of patents and other IP — has been a long speculated upon exit, but it never quite seems to materialize. Fairfax Financial got close with a provisional agreement in 2013, but that deal fell through when John Chen was appointed CEO. Four days after that, the board determined a breakup and sale of BlackBerry was not in its shareholders interest. Acquisition rumors by Microsoft or Samsung never got much past the rumor phase.

“We are committed to reclaiming our success,” Chen wrote in an open message on the firm’s blog.

Unfortunately for BlackBerry, consumers have not show quite the same commitment to helping them get there.

However, in November 2015, a faint, but very sparkly glimmer of hope appeared on the horizon regarding BlackBerry’s mobile device business: the Priv.  

Abandoning their in-house operating system and leaping onto the Android bandwagon, albeit with some very BlackBerry customizations around design and security.

“While the Priv user interface is simple and beautiful, BlackBerry has performed extensive surgery under the hood to augment Android’s privacy and security capabilities,” noted BlackBerry’s Chief Security Officer David Kleidermacher. “Android is a complex, rapidly changing, massively popular, open-source product, which makes it an attractive and fertile target for attackers. Such an environment demands world-class security incident response, and BlackBerry has a long history delivering that to customers with the highest value resources under their (and hence our) protection. BlackBerry’s vulnerability patch program is second to none in the industry.”

And, in something of a change of pace of BlackBerry, the device was well reviewed and forecast to potentially be the device that could bring the struggling device maker back from the brink.

That was November of last year.

As 2016 gets its second month underway, it is looking increasingly like BlackBerry’s future as a device maker may just be past the point of no return. Some are saying that there is still a chance BlackBerry phones hold on – as purely Android-based devices like the Priv – but most think that it might be time for BlackBerry to focus on the Enterprise Mobile Management and Security software products it can profitably bring to the table.

Yet Another Round Of Staff Cuts

As last week was drawing to a close, BlackBerry announced that another 200 or so jobs had been cut. BlackBerry would not confirm or deny that those positions were all within the firm’s handset manufacturing division. The firm’s official statement on the closures:

“As BlackBerry continues to execute its turnaround plan, we remain focused on driving efficiencies across our global workforce. This means finding new ways to enable us to capitalize on growth opportunities, while driving toward sustainable profitability across all parts of our business. As a result, approximately 200 employees have been impacted in Canada and Florida. It also means that BlackBerry is actively recruiting in those areas of our business that will drive growth. For those employees that have recently left the company, we know that they have worked hard on behalf of our company and we are grateful for their commitment and contributions.”

That statement, however, followed reports in the Globe and Mail that had cut 75 positions at its Sunrise Florida manufacturing factory and MobileSyrup reports that BlackBerry is cutting 35 percent of the positions at its Waterloo manufacturing plant.

And while these are the first cuts of this year – the slash and burn in BlackBerry’s worforce has been on for some time. BlackBerry announced staffing cuts in May, July and September of last year — most of which came from the firm’s smartphone business. In fact, that last round of layoffs in September brought a statement from CEO Chen that killing the device business entirely is on the table going forward.

“Sometime next year we have to make our device business profitable, otherwise I have to rethink what I do there,” Chen said. “My job is to make sure the value of the company is protected and increases. … Even if I’m not in the handset business, getting into providing security for Android lets us provide solutions via software.”

And, as earnings released in December indicate, devices are far from reaching profitability, and the big staffing cuts seem to just keep on coming.

Exactly how many employees are on the BlackBerry rolls these days is a bit of a question mark; the last official release indicated that as of February 2015, the firm had 6,225 full-time staffers. Estimates today put that figure somewhere around 5,500. At its height in 2007, BlackBerry employed 17,000.

Is Android The Future?

The Priv has been somewhat successful, though as is often the case in mobile tech it’s hard to assign a hard figure to that because BlackBerry hasn’t broken out specific data on it. Inductive reasoning, however, would indicate that BlackBerry got at least some people on the Priv.

The Priv, at $700, is BlackBerry’s most expensive phone by far.

“The initial 30 days of sales has been quite positive,” Chen said. “I don’t want to overhype things. It’s an expensive phone.

And while Chen is avoiding the hype, at least some the BlackBerry team are pretty optimistic at the prospects moving forward on the alternate OS.

“The future is really Android. We went for Android essentially for its app ecosystem. In addition, all the enterprise solutions that we have been doing have been cross-platform for a long time now. So it’s a natural progression towards Android,” the company’s Asia Pacific director of product management Damien Tay told India’s Economic Times.

However, not everyone is convinced of that — noting that unless Priv takes off spectacularly, it may just not be enough to right the BlackBerry ship, particularly if the firm’s CEO’s deadline for doing so is by the end of 2016.

So what’s next? Is it really the end of BlackBerry this time?

Doubtful, as it still has that massive reserve of IP, patents and the quiet but not inestimable progress it has made over the last 18 months or so hedging its bets and further developing its capacities as a provider of enterprise security and EMM. But is this the end of BlackBerry as a phone maker?

Of devices that are wholly its own, it seems almost certain that it is. For devices that are Android enhanced by BlackBerry, the clock is ticking and it remains to be seen if the 11.5 months left in this year are enough time for the phone to become a competitor.


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