BlackBerry Gains on IoT Growth, but Sours on Guidance Cut

BlackBerry Ltd BB was once the leader in the smartphone segment in the mid-2000s when they were known as Research In Motion. Their BlackBerry smartphones had built-in physical keyboards and a trackball utilizing SMS technology. Its users could be identified by clicking away at the tiny keyboards and small screens throughout the day. They ushered in the early days of the smartphone era.

The Smartphone Revolution Passes By BlackBerry

The advent of Apple Inc. AAPL iPhones and Samsung Electronics Co. Ltd SSNLF Galaxy smartphones eventually took over the market with on-screen keyboards, larger screens and lighter sleek designs with infinite applications. Research in Motion changed its name and identity to BlackBerry, ditched its clunky smartphones and transitioned into a software company focused on enterprise cybersecurity, software licensing and Internet-of-Things (IoT) in the computer and technology sector. Needless to say, the competition has been stiff, especially against giants such as Palo Alto Networks Inc. PANW and Fortinet Inc. FTNT.

Transitioning from Hardware to Software

While BlackBerry continued to lose market share among consumers, its QNX operating system was still very respected for its exceptional security features, including encrypted messaging, threat detection and secure emails. It's one of the main reasons the United States Department of Defense (DoD) standardized BlackBerry devices over iPhones as a protocol for its employees. BlackBerry devices were the preferred devices among government agencies to protect sensitive information from espionage and cyber threats.

This helped transition the company to ditch the hardware and embrace the software model to further claw out a niche in the mobile cybersecurity segment. They hold numerous patents in mobile security and communication protocols. In fact, Research in Motion was notorious for never-ending litigation defending its patents, often perceived as the original "patent troll." 

From Patent Troll to MDM and UEM Solutions Provider

BlackBerry ditched the hardware in 2016 and sought to establish itself in the mobile device management (MDM) and unified endpoint management (UEM) segment. The company even found itself licensing its data analysis and embedded systems to the vehicle industry. The company has developed its artificial intelligence (AI) powered Cylance cybersecurity solution, which it claims has prevented 133% more attacks, performing 13X faster while utilizing 20X less system overhead than the competition. Its IoT business has also emerged as a promising growth engine. The company has been struggling to return to its glory days as it has failed to achieve consistency with its results.