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BlackBerry's Passport to Success Is Services

Sarah Thomas
9/24/2014
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BlackBerry's newly launched Passport phone is an ugly square qwerty-keyboard device that will appeal to some heavy business users and repel others, but that's really not what matters. If BlackBerry is to have a future at all, it will be in software and services.

That has been my feeling ever since the company went private and John Chen took over as CEO. BlackBerry was the one-time enterprise smartphone king, but it has struggled to keep up as iPhones and even Androids became suitable business devices. (See Time to Flip BlackBerry's Handset Kill Switch and BlackBerry Inks Deal to Go Private.)

That said, when it comes to security, the company's BlackBerry Enterprise Service (BES) is still the best; BlackBerry Messenger (BBM) still has a loyal following; and QNX, the operating system the company acquired in 2010, is a great platform for machine-to-machine devices. I don't know whether BlackBerry will find a following for the Passport device as it hopes -- early reviews seem mixed -- or its forthcoming Classic phone, but either way I think BlackBerry is starting to understand that it needs to focus on being a services company, not a smartphone maker. (See Eurobites: BlackBerry Buys German Security Firm.)

BlackBerry Passport
AT&T will be the only carrier to offer BlackBerry's new device, which is going for that love it or hate it kind of vibe.
AT&T will be the only carrier to offer BlackBerry's new device, which is going for that love it or hate it kind of vibe.

Jackdaw Research analyst Jan Dawson, who was at today's Passport launch event, agrees that BlackBerry's main focus is now messaging with its Messenger platform, M2M with QNX, the OS it acquired, and enterprise services, with BES at its core. Dawson gets the impression today that Chen believes this as well to a certain extent, but remains bullish on the future of BlackBerry's devices business. (See BlackBerry Wants a Fruitful Future in M2M.)


For more on the latest smartphone launches, visit our dedicated devices content channel here on Light Reading.


"BlackBerry does seem to be more realistic about where it should focus its efforts with devices than it has been in the past, and that's a really good thing," Dawson writes in an email to Light Reading after the event. "But John Chen hinted just now during the press Q&A that the Classic device they'll launch between now and the end of the year will be a bigger seller with a broader appeal than the Passport. I worry that this suggests they haven't given up on the broader smartphone space, which, frankly, they should at this point."

Right now, of course, all of the businesses Dawson mentions are still closely tied to BlackBerry devices, but that doesn't have to be the case. BBM is available on Android now, and BES can be a device-agnostic device management platform. It's in BlackBerry's best interest to keep positioning both as such, gradually distancing them from devices even more. (See BlackBerry's Chen: We're Not Dumping Devices.)

BlackBerry has already held on longer than many thought it would, and it's now counting on the Passport and Classic to drive its comeback story. I have my doubts that will be the case, but I think if the company focuses on its strength in services and software, it has a chance. That will be its passport to success, not a squatty little niche smartphone.

— Sarah Reedy, Senior Editor, Light Reading

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sarahthomas1011
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sarahthomas1011,
User Rank: Light Beer
9/24/2014 | 12:37:57 PM
Design critique
I admit I've never owned a BlackBerry, so I'm a bit biased, but I think the new phone is pretty hideous, although it looks like it will be easy to type on. What do the rest of you think? Do you like that the new phone breaks the mold?
jasonmeyers
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jasonmeyers,
User Rank: Blogger
9/24/2014 | 1:18:25 PM
Re: Design critique
I have used a couple different iterations of BlackBerrys (BlackBerries?) and never cared much for them -- too bulky, and often had issues with malfunctioning keys. I made a fast transition to the iPhone several years ago and never looked back. I suppose some users still prefer the physical keyboard. 
jasonmeyers
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jasonmeyers,
User Rank: Blogger
9/24/2014 | 1:19:46 PM
Re: Design critique
Oh and no -- I don't think the new design breaks any molds. 
sarahthomas1011
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sarahthomas1011,
User Rank: Light Beer
9/24/2014 | 1:43:34 PM
Re: Design critique
I think it breaks molds in the design itself, but that's probably not a good thing.

MKM Partners seems to agree overall and expects more M&A for BB as it works out this services strategy.

From their research note:

CEO does not seem that enthusiastic about Passport. John Chen did his best to project excitement about the Passport launch, but his heart did not seem to be fully in it. He noted that the product's development pre-dated his joining the company, and said he expects the upcoming Classic to appeal to a much broader base of BlackBerry users. Mr. Chen likely sees the company's future more in the Software and Services spaces than in Hardware. We think BlackBerry is likely evaluating potential M&A in the Enterprise Security, Messaging Applications, Connected Auto and Tele-Medicine markets.
Russetb
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Russetb,
User Rank: Light Beer
11/27/2014 | 10:38:07 PM
Re: Design critique
To the author -  you say, "Since Blackberry went private" ...?!  Gee, nobody told me, I still own the stock under the symbol BBRY.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
9/24/2014 | 1:58:59 PM
Re: Design critique
People who love BlackBerrys love the usefulness, and don't care if they're ugly. 

I know two people who still love their BlackBerrys. One of their reaction to the Passport is "SHUT UP AND TAKE MY MONEY!!!" IOW, she loves it. 

The other guy's IT department forced him to switch from his BlackBerry to Windows or iPhone. He picked the iPhone -- unhappily. 

As to the thesis of this article: I don't disagree, but Steve Jobs said that people who care about making great software need to also make hardware for it to run on. IOW, if the companies don't control the hardware, the software won't run as well as it should. 
Phil_Britt
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Phil_Britt,
User Rank: Light Sabre
9/25/2014 | 5:44:51 PM
Re: Design critique
You're right about the usefulness being the hook. Security is, too. BlackBerry is still considered more secure than other smart device options.

 

 

 

 

 

 

 

 

 
pcharles09
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pcharles09,
User Rank: Light Beer
9/25/2014 | 11:05:14 PM
Re: Design critique
@Phil_Britt,

I think BB is one of those devices that's secure due to obscurity nowadays. Hackers spend less time trying to crack it because the exposure base is not as big as others.
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