BlackBerry’s Strategic Investment and Position in Today’s Economy
BlackBerry, the former mobile phone giant, returned to positive cash flow in the first quarter of this year —something the company hadn’t achieved since 2017.
This recovery was driven by an automotive operating system called QNX, as well as Secusmart, an encryption software used by governments and some of the world’s largest banks.
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While these platforms may be less visible than the cell phones that once defined BlackBerry’s trajectory in the 2000s, but today they are an integral part of the daily lives of millions of people.
“QNX has… really taken off,” John Giamatteo, BlackBerry’s CEO since December 2023, told the Financial Times from the company’s headquarters in Waterloo, Canada. “We’ve gone through a period of transformation, and now we’re in a period of growth,” he added.
It’s worth noting that BlackBerry stopped selling phones in 2016 to focus on software and services for businesses.
BlackBerry’s Lifesaving Investment
Today, the Canadian company’s decision to acquire QNX in 2010 for approximately $200 million, as well as its acquisition of the German encryption services provider Secusmart four years later, is paying off.
QNX technology, which is also used in robotics, medical devices, defense, and aerospace, now accounts for about half of BlackBerry’s revenue, a sign that the acquisitions have set the company up for a brighter future.
“I’m very happy for them,” said Jim Balsillie, the former co-CEO who left the company in 2012 and was once one of its largest shareholders. “The acquisition of QNX paid off,” he told the FT.
BlackBerry remains a shadow of the $83 billion behemoth that once held a roughly 20% share of the global cell phone market, before it was “dethroned” by Apple, Samsung, and Google.
However, its stock surged 150% over the past year, and its current market capitalization stands at approximately $5.2 billion. On the day its earnings were announced in June, the stock rose by about 20%.
The 2014 acquisition of Secusmart, a company specializing in anti-eavesdropping software, now appears even more prescient, as global unrest has prompted countries around the world to increase their defense spending. The company provides “NATO-grade” encrypted voice, text, and messaging services to 20 governments.
Deeply embedded in today’s economy
Giamatteo said that the company’s technology has become so widespread that many people likely use BlackBerry products every day without even realizing it.
“Almost every automaker in the world uses BlackBerry,” he said. “And we’re seeing increasing adoption in the design of future cars in China, Europe, and North America.”
Kevin Michaluk, a Canadian entrepreneur who launched a campaign to bring back the old devices and sells his own version of the BlackBerry keyboard, said that the company is now strategically more important than it was when it was selling phones.
“It’s less visible, but undoubtedly more deeply embedded in the modern economy,” Michaluk, who became known as “CrackBerry Kevin,” told the FT, adding that such a story… of a complete comeback is rare in the tech industry.
“The market spent years valuing BlackBerry based on what it once was. More recently, investors seem increasingly willing to value it based on what it actually is today.”
Source: in.gr
