Mobility

Why the future of BlackBerry has nothing to do with hardware

Times are turbulent for BlackBerry, the once great smartphone manufacturer. However, the company could turn things around if it drops its hardware business.

BlackBerry CEO John Chen at MWC 2015.
Image: Sarah Tew/CNET

I remember when I got my first smartphone — a BlackBerry, when I was a college student on summer break. My father made his (now infamous) prophecy that having access to the internet at all times was something I absolutely needed and I made the purchase and walked out the door with the internet in my pocket.

BlackBerry used to be the calling card of the tech-savvy professional. It was ubiquitous in boardrooms and at conferences, and BlackBerry Messenger (BBM) was the go-to communication channel.

Then, the iPhone came along, Android exploded in popularity, and BlackBerry began its decline. New user growth slowed, the stock plummeted, and everyone was left wondering how this all happened.

For a long time after the introduction of the touch screen form factor, BlackBerry differentiated itself as the phone with the physical keyboard. Even now, there are still some users that prefer to type on physical keys.

However, even with the introduction of touch screen devices, starting with the ill-fated BlackBerry Storm, the company was still losing its grip on the market. Now, the company's hardware division is a dead-weight anchor, and BlackBerry needs to decide if it will pull the anchor in or cut the line.

Lately, there's been a lot of talk about BlackBerry cutting its losses and running Android on its devices. In fact, BlackBerry has reportedly purchased Android-focused domain names that seem to point to some sort of potential Android project in the works for BlackBerry.

Other recent partnerships show the company getting closer to Google and Android, but they may point to the company heading in a completely different direction. One that might not even include a BlackBerry handset.

"BlackBerry recognizes that their hardware is not going to be their money maker long term. I believe their CEO, John Chen, realized this the day he came on board and has been actively transitioning their company into a multi-business unit, multi-pillar company," said Forrester analyst Tyler Shields.

In early July 2015, BlackBerryrolled out some updates to its MDM platform, BlackBerry Enterprise Service 12 (BES12), to provide better management for Android for Work, Samsung Knox, and iOS devices.

"It makes sense, particularly given BlackBerry's security and systems strengths - and an interest in growing its software business. For Android/Google, the more immediate benefits of such a partnership will most likely be seen in the enterprise - namely, via Google for Work," said Ryan Martin, analyst at 451 Research.

One thing that BlackBerry has always done well is security. Shields said he believes that the company will be able to leverage that legacy to transition its core offering from hardware to enterprise mobile security through MDM and EMM.

In that sense, the partnership with Android for Work, and the steps the company has taken to make itself more accessible to Samsung and iOS devices, makes total sense, as the company needs to be as close as possible to the parent companies in order to effectively help manage the devices.

It's a low-risk partnership for Google, Shields said, as they don't have much to lose in the deal and the BlackBerry name could help win them further penetration in the enterprise through mobile.

If the Android for Work partnership ends up bearing fruit, the potential upside for BlackBerry is help in changing the market perception that they are simply a hardware company.

Shields said that as BlackBerry continues building out its enterprise software business, it could end up looking something like BlackBerry having its own MDM software that sits on the device. So, BlackBerry is basically positioning itself to compete with the likes of Airwatch and MobileIron.

How ever, if they want to compete in that space, they'll need to find another value to add on top of what they're currently offering.

"In supporting Knox and Android for Work through BES12, they are simply doing what all the other EMM products are doing — it's table stakes," said Gartner's Ken Dulaney. "This does not bode any unique feature set that will result in any material financial upside for the company."

Moving forward, Shields said he believes BlackBerry will differentiate itself with the history of their platform's security, but they will also go after content security and network security.

"They'll want to play in the secure network gateway space where the data that comes off these devices goes through the BlackBerry NOC for security and management," Shields said.

With all that said, there is still the possibility that BlackBerry could adopt Android on its devices. If that did happen, though, it could be a strategy they'll use to make the transition away from the hardware, but ultimately, it's not the end game, Shields said.

The risk for BlackBerry is falling flat if it isn't able to properly transition out of hardware in the right time frame and end up as another Android vendor competing in a crowded market.

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About Conner Forrest

Conner Forrest is a Senior Editor for TechRepublic. He covers enterprise technology and is interested in the convergence of tech and culture.

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