A Look At BlackBerry’s Deals And Acquisitions In 2014
BlackBerry (NASDAQ:BBRY) had a difficult year, with its revenues set to decline by over 40%, owing to a plummeting hardware market share and the consequent decline in its lucrative system access fees (SAF). However, the company executed reasonably well on its strategy of transitioning into an enterprise-focused provider of mobility solutions, introducing its latest BES 12 mobile device management software, acquiring new customers through its EZ Pass program while also looking to retain its core enterprise audience by launching new handsets such as the Passport and Classic. In this note, we take a look at some of the new deals and acquisitions that BlackBerry carried out through the year in order to reinforce its enterprise strategy.
Movirtu Acquisition Strengthens BlackBerry’s BYOD Strategy: The bring-your-own-device (BYOD) trend has been becoming more prevalent in the enterprise mobility space, allowing employees to use their personal smartphones for corporate purposes, with enterprise applications and security needs being addressed by corporate IT departments. BlackBerry is leveraging this trend as a key component of its turnaround strategy. In September, the company acquired Movirtu, a U.K. based start-up that provides a virtual SIM platform that allows users to operate their personal and business phone numbers on the same smartphone. Movirtu will also allow users to split bills for voice, data and messaging based on their personal and enterprise usage. The technology works on the iPhone, BlackBerry as well as Android based devices. The acquisition complements the company’s current efforts in the mobile device management space and will be an extension of the company’s existing technology offerings such as BlackBerry Balance and Secure Work Space, which separate personal and enterprise applications and data on smartphones.
Secusmart Acquisition Improves Secure Communication Capabilities: In late July, BlackBerry entered into an agreement to acquire Secusmart, a German mobile security company that provides high-security voice and data encryption and anti-eavesdropping technologies. Secusmart counts the German chancellor and several other government officials as users and is one of the market leaders in classified communications technology. While BlackBerry has been collaborating with Secusmart in the past, the acquisition will allow the company to offer end-to-end security protection, given that it will now have complete control of the hardware, operating system, device management and security technology. Encrypted voice-based communications are beginning to receive a lot of attention, on the back of increased concerns of electronic eavesdropping, surveillance and data theft, and mobile technology companies have been emphasizing on security in order to acquire new customers. While the Secusmart acquisition is unlikely to have much of an impact on BlackBerry’s financial performance or its mass market appeal, it could help to bolster the company’s reputation as one of the leading players in the mobile security space.
Amazon Appstore Deal Frees Up Resources To Aid Enterprise Focus: In June, BlackBerry signed a deal with Amazon, enabling it to offer apps from Amazon’s Appstore on its BlackBerry 10 devices. With the agreement, BlackBerry more than doubled the number of applications available to users, while also introducing several popular apps including Netflix, Candy Crush Saga and Pinterest that were previously unavailable on its platform. Many application developers have been reluctant to write apps for BlackBerry, given its miniscule market share of under 1%. In contrast, Android and iOS together hold over 90% of the smartphone market, making them the platforms of choice for app developers. By teaming up with Amazon, BlackBerry should be able cut down costs since it wouldn’t have to court developers and would also be able to scale-down on developer relations and support. At the same time, the company will be able to offer users a growing roster of consumer-focused apps from the Amazon store, improving the attractiveness of its smartphones.
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