How Important Is The Software Business To BlackBerry?
Software is likely going to be BlackBerry’s (NASDAQ:BBRY) most important business unit going forward. It is likely to account for almost all the company’s future growth, as the Service Access Fee business plummets amid attrition of legacy users, while the handset business faces headwinds amid a slowing smartphone market. BlackBerry expects software sales to grow by about 30% this fiscal year, compared to the broader mobile software and service market, which is expected to grow 20% to 25%. BlackBerry’s relatively strong BES customer adds (10k subscribers over the last fiscal year) and its November 2015 acquisition of Good Technology are likely to be key near-term drivers of the business. We expect the division to grow at a CAGR of about 13% over the long-term, as the QNX embedded software business and other bets such as Internet of Things drive revenues.
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Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for BlackBerry
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