By Jamie Barrie B lackberry appears to be sending mixed messages to analysts regarding the futuredirectionof the company with recent announcements on new software deals. Those watching closely are assessing the firm’s turnaround potential as software contracts are clearly playing a much bigger part of their sales mix than anticipated. The former smartphone leader announced a five year, multimillion-dollar contract with the U.S. Senate to handle their emergency notification needs. At the same time, it was announced an existing deal with the U.S. Coast Guard has been expanded. The Canadian based high tech firm also reported good news that the U.S Department of Defense, a large Black- berry customer, gave a technical thumbs up for their phone software and mobile management system. This move will make Blackberry a preferred vendor which is a major advantage for the company. Even with some positive news, markets were not respond- ing with small declines in share price for Blackberry stock. The primary concern given was that their apparent move towards being a security company needs work. “If you are going to be a security company, you have to be known for that neutrality in the market,” said Nick McQuire, vice president for enterprise research at CCS Insight.
Blackberry’s continued pursuit of the handset business is what causes some experts to feel they aren’t positioned well to be a security leader. New models are rolling out and BlackBerry CEO, John Chen has set a September deadline for handsets to turn a profit. “From my conver- sations with many of its customers, there’s still a tremen- dous amount of confusion out there around BlackBerry because of the handset business,” McQuire added. The handset business may be in trouble as BlackBerry’s adjusted revenue from applications and services sur- passed the declining value of handset sales last quarter. Some critics are demanding an even stronger push into the application market segment. “We’re going to have to see a lot of these types of deals from them going forward to really get the sense that they are moving in the right direction,” said Phil Hochmuth, program director for enterprise mobility at Internation- al Data Corp. Blackberry also struck a deal for its QNX software with a locomotive manufacturer in Turkey and a partnership agreement which allows coders to translate corporate apps for Blackberry systems. When September ends the picture shouldbemuch clearer for investors. If handset sales bottom out again, CEO Chen will have no choice but to seriously consider exiting that market.
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AUGUST 2016 • SPOTLIGHT ON BUSINESS
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