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article imageOp-Ed: Would it be beneficial for BlackBerry to move on from phones?

By James Walker     Apr 15, 2014 in Technology
The troubled smartphone manufacturer BlackBerry is considering moving away from smartphones according to its CEO, John Chen, but would this actually be beneficial to the company?
The CEO of failing smartphone manufacturer BlackBerry, John Chen, said in a public interview last Wednesday that if its current handset business for which it is famous continued to remain as unprofitable as it currently is, then he would seriously consider leaving the market, saying "If I cannot make money on handsets, I will not be in the handset business." He later added that the time remaining to make such a choice was running out but suggested that BlackBerry could profit if they shipped 10 million handsets a year.
To avoid confusion, Chen also clarified his statements further on the official BlackBerry blog, writing "I want to assure you that I have no intention of selling off or abandoning this business any time soon. I know you still love your BlackBerry devices. I love them too and I know they created the foundation of this company. Our focus today is on finding a way to make this business profitable."
Chen hinted that if it was decided that it would be best for BlackBerry if they folded their handset division that they would likely expand into business areas involving security and law themes. Later in the interview he revealed that he would be willing to acquire companies to strengthen BlackBerry's hold of the network security market and would also partner with others, saying "We are building an engineering team on the service side that is focused on security. We are building an engineering team on the device side that is focused on security. We will do some partnerships and we will probably, potentially do an M&A on security."
The question however is whether selling the smartphone business and moving into security systems would actually save the falling company. BlackBerry handsets are still very popular with the younger generation, particularly with teenagers who are drawn to the company's own BBM messaging platform enabling free instantaneous messaging between BlackBerry users over the internet. Sales of the newest BlackBerry 10 devices such as the Z10 and Q10 have been strong although not strong enough to rock the boat of Apple, Google or even Microsoft's Windows Phone 8, which is continuing to see strong increased growth, particularly in Europe.
BlackBerry's key problems rest around the simple fact that the competition is still much stronger than anything that they have produced. Whereas they were once the phone of choice for professionals, attracted to the physical QWERTY keyboard reminiscent of their computer keyboards and strong email and corporate facilities, now there is hardly a BlackBerry to be found in an office as companies turn to Apple, Google and now Microsoft.
BlackBerry has failed to keep up with the other huge smartphone players. Whereas the other manufacturers sported the large, touchscreen displays wanted by consumers many years ago, BlackBerry has only just followed the trend recently with the Z10. Similarly, most, if not all, smartphone users like being able to download extra apps and games beyond those supplied with the phone from well-stocked app stores such as the App Store, Google Play and the Windows Store. BlackBerry's store is now looking distinctively bare while prices for apps remain higher than those in their competitors' stores. Whereas it could be said that the Windows Store is also quite empty in terms of available apps, Microsoft is growing the number of available apps rapidly and BlackBerry is now trailing far behind.
The QWERTY keyboard of BlackBerry of old is now redundant as people prefer on-screen touch keyboards customisable with downloaded apps and governed by software. The other advantage of non-physical keyboards is that it enables the entire front of the device to be covered with a large, high-resolution display.
BlackBerry, in my opinion, needs to come up with an entirely new kind of device — take the market in a new direction where the competitors have not yet gone — if they are to succeed in becoming profitable again in the mobile phone division. Therefore maybe Chen's idea of turning to security products is actually quite wise.
Since Edward Snowden's leaks last year about the extent of NSA spying on internet usage, security has become much more important to both home and business users. If BlackBerry could create a decent product before the other existing security companies such as Kaspersky, Norton and McAfee have a chance then it may be picked up for use by individuals and companies.
Chen's other idea is to invest in developing the Internet of Things: the new concept of connecting all manner of devices together across the internet including appliances and cars to enable consistent data sharing and automaticity across all life functions — a fridge could order more milk when it runs low, for instance.
This is, in my opinion, perhaps one of the best paths for BlackBerry to explore. Currently, the Internet of Things is little more than an interesting concept to be explored and very little is actually being done to facilitate its creation. BlackBerry's engineers could, potentially, create a protocol enabling the data transfer between devices such as fridges and toasters and the wider internet or develop a method of storing the created data. This could then be combined with the security vision highlighted above: BlackBerry could create a secure, protected method of building an Internet of Things and then license the design to other companies for use in their products. Whereas all of the above is of course speculation on my part it could be a feasible thing for the company to do whilst the smartphone business is turned around and headed in the right direction. However, doubts are surrounding how useful the Internet of Things will actually be or when it will even be deployed in a wide-spread fashion. John Chen also expressed these doubts in the interview saying he was ensure how long it will be before the "machine-to-machine" concept of the Internet of Things becomes a mainstream reality but he said "We are not only interested in managing BlackBerry devices. We are interested in managing all devices that you would like to speak to each other." He added that this would, like the security business idea, require partnerships with other companies including lengthy deals with the telecoms giants of the world to facilitate the transfer of such large data volumes from all types of device and appliance.
BlackBerry Smartphones | FindTheBest
Regardless of which route BlackBerry takes, however, it must decide quickly as its finances are only deteriorating month-on-month. In March it reported losses of $423 million for the quarter, equal to a 64 percent drop in revenue. This highlights the challenges that Chen is faced with if he is to successfully make the company profit once more although he is regarded well by insiders of the technology industry who highlight how he successfully turned around Sybase Inc in the late 1990s, an enterprise software company. BlackBerry has made 9,500 employees redundant over the last three years but losses still continue to rise. The company had a 20 percent share of the smartphone market in 2009, before the real rise of Android and Windows Phone, but by the end of 2013 it held less than 2 percent — a sign of consumer choice when it comes to buying a new phone today. Chen is determined however to not lose focus on the corporate market as that enabled BlackBerry to grow to its previous heights in the first place and says he "would not be tempted back into the much larger but more fickle consumer smartphone race" — perhaps a hint of what is to come from the doors of the well-known but badly failing BlackBerry phone division?
Chen's aforementioned idea of 'small acquisitions' to bolster the business also took shape today with BlackBerry's acquisition of NantHealth, a Californian-based company known for its cloud-based service enabling the quick and efficient transfer of patient data between professionals and smart medical machines in the health care profession. It currently connects nearly 16,000 devices in over 250 hospitals. NantHealth founder Patrick Soon-Shiong said in a statement "BlackBerry's expertise is incredibly valuable to NantHealth as we expand our platform and make it available for wider deployment through a secure mobile device." He also added that the possibility of BlackBerry entering the security market would further aid the creation of the 'secure mobile device'. What exactly Chen intends to use NantHealth for still remains to be seen, of course, and it is unclear whether this acquisition is intended as a long-term deal or as a short-term one to bring in a bit of much-needed cash. For now, we will have to watch and wait...
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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