Remember BlackBerry?

• Global
• Amazon Web Services, Artificial intelligence, AWS, BlackBerry, Internet of Things, Machine learning, Tech
• December 1, 2020

Way back in 2007, there was a smartphone manufacturer whose share price tripled in a 12-month period. No, it wasn’t Apple. It wasn’t Samsung. It wasn’t Huawei.

It was BlackBerry.

We all had them. It meant you could speak to your mates and significant other for a fraction of the cost. Teens and students left Mxit and joined BBM. Companies loved them for their email functionality. It was only 13 years ago that having email on your phone was revolutionary.

Apple released the iPhone in 2007 into a market where Blackberry was king. Fast forward a few years and Blackberry was nowhere to be found.

It may have disappeared from our pockets, but it hasn’t disappeared from the markets. Blackberry is still a $5bn company, although that’s been helped by a 57% rally in the share price. It was nearly a $3.3bn company before today.

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Why should anyone care about BlackBerry again?

BlackBerry mostly laughed off the smartphone fight and decided to become a “market leading platform for enabling Internet of Things.” This is a tough thing for non-techy people like me to understand.

Luckily, the corporate website goes on to explain it as “leading the way with a single platform for securing, managing and optimising how intelligent endpoints are deployed in the enterprise.” Clear as mud, then.

Let’s take a step back and understand what the “Internet of Things” or IoT is, which will help in understanding what BlackBerry does these days.

IoT simply refers to a greater number of devices (things!) being attached to the internet. For example, your fridge or your car. Smart TVs and digital assistants like Amazon Alexa and Google Home are made possible by this.

As our worlds become more connected, beyond just our smartphones and computers, IoT is a trend that investors need to take notice of.

Full credit to BlackBerry in identifying this space as an attractive place to play. My overarching memory of my BlackBerry at university was the buttons that kept breaking out the keypad, so leaving phone hardware behind was probably the right call for the company.

Isn’t it amazing that a smartphone company was primarily disrupted by WhatsApp, which rendered BBM unnecessary?

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Does it make a profit now?

No.

Also, BlackBerry’s primary investment in the IoT endpoint security market isn’t doing spectacularly well either. BlackBerry acquired Cylance for around $1.4bn in February 2019. They guided the market that Cylance could grow between 25% and 30% in 2020, but the result was unfortunately flat instead.

Considering the market is estimated to be growing at 7% – 8% per year, this makes it easy to conclude that BlackBerry is losing market share.

Why did the share price rally over 50% in one day?

BlackBerry will partner with Amazon Web Services (AWS) to jointly develop and market its vehicle data integration and monitoring platform, called IVY. Basically, this will allow car manufacturers to deliver new features and functionality to customers over the lifetime of their vehicles.

The cars of tomorrow will be smartphones with wheels. They will be upgraded and updated remotely, just like apps on your phone.

Through collaborating with AWS, IVY will use machine learning (artificial intelligence) and BlackBerry’s security technology to offer manufacturers a solution not just for improving the customer experience, but for monitoring vehicle data as well.

Will this work?

It’s encouraging that BlackBerry and AWS have already got a working relationship. BlackBerry’s QNX service, which enables manufacturers to build cars with fully digital instruments, is already in 175 million vehicles. QNX is powered by AWS.

However, BlackBerry’s long track record of disappointment will be hard to shake. While investors have cheered this news with a 50% jump in the share price, BlackBerry is still down 94% from its hey-days in 2008.

The share price has achieved nothing through the age of the smartphone, now trading at the same levels as in 2012. The company was quick off the mark with smartphone technology, but then lost out in the end through poor execution.

Will the same thing happen with IoT, a space where competition can only heat up from here? Only time will tell.

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