EUR 850.00 For Business Accounts Only

Morningstar | BlackBerry's Focus on Security Continues

We believe BlackBerry is well on its way to becoming an enterprise software company, but success remains to be seen. Although the company has announced it is leaving the hardware business, uncertainty regarding royalty revenue from the mobility solutions segment, along with the elimination of the high-margin service access fees, makes an investment in BlackBerry a risky one, in our view.Through various acquisitions and the reallocation of resources toward the faster-growing and higher-margin enterprise mobility management, or EMM, software space, BlackBerry remains focused on transitioning from a hardware company to an enterprise software company. We applaud the company’s acquisition of Good Technology, which showed BlackBerry’s seriousness in making its EMM offerings platform-agnostic, potentially attracting some of the growing number of enterprises that have adopted the bring-your-own-device, or BYOD, model. BlackBerry has already become one of the market-leading players, which is one of the reasons why we upped the firm’s no-moat trend to stable from negative.Unfortunately, the firm’s success on the enterprise software side remains masked by the struggles in its smartphone hardware business. It certainly took some time for BlackBerry to realize that attempts to revitalize its smartphone business will not generate any returns, as the company was slow to react to and compete effectively with the market-dominating Apple iOS and Google Android device operating systems. BlackBerry has finally acted on this realization, as it has announced that it is washing its hands of the hardware business. With continued loss of market share and the wider acceptance of the BYOD model, BlackBerry realized that its handset business could not become consistently profitable.