BlackBerry surprised investors on Wednesday, announcing a recent quarter of profitability. But it wasn’t because of a sudden surge of phone sales inspired by the recent movie about the company. Instead it was because of a complex sale of non-core patents, netting the company some ~$218m, helping the company add to its cash reserves.
Nostalgia calling
The first device to hold the BlackBerry name came out in 1999 — a ground-breaking two-way pager capable of delivering email across multiple wireless networks. That focus on email and its workplace functionality drove the company to new heights throughout the early 2000s, with sales peaking in 2011, just as the iPhone and other touchscreen devices were going mainstream.
But sticking to the corporate market was also BlackBerry's undoing. A fractured leadership and a too-late foray into tablets and touchscreen phones (like the BlackBerry Storm) was ill-fated, and the rise of the open Android ecosystem saw the company lose ground quickly, as developers built apps for rivals. In the coming years the clickity-clack of the iconic tiny keyboards slowly faded — despite some power users, including former President Obama, clinging dearly to their BlackBerry’s.
The security switch
As businesses and governments favored BlackBerry phones for their security features, the company realized that selling this underlying software, instead of the hardware, could be a viable parachute strategy for the ailing company. The shift clearly didn’t restore revenue to its peak, its most recent sales amounted to just 3% of that high, but it did ensure the survival of the company.
Today, Blackberry's IoT (Internet of Things) business provides software into over 235 million vehicles for various functions, ranging from driver assistance to infotainment systems, while the company’s cybersecurity solutions are used by numerous mobile banking websites.
