Thanks to a car operating system and encryption software, BlackBerry is making a comeback
BlackBerry, the Canadian company behind the mobile phones that dominated the market until the arrival of the iPhone, is enjoying an impressive comeback. For the first time since 2017, the company reported a positive cash flow.
BlackBerry, the Canadian company behind the mobile phones that dominated the market until the arrival of the iPhone, is enjoying an impressive comeback — this is reported by the Financial Times. For the first time since 2017, the company reported a positive cash flow for the first quarter of the year. At the same time, the stock has surged by 137% over the past year, against the backdrop of a 347% increase in net profit in the first quarter to $8.5 million compared to $1.9 million in the same quarter last year. At the same time, BlackBerry's market value stands at $5.2 billion, a fraction compared to the $83 billion during its peak period.
BlackBerry phones with the attached keyboard were once considered almost a must-have item and enjoyed the support of figures and celebrities, from former US President Barack Obama, who found it difficult to give up his device when he entered the White House, to celebrities like Brad Pitt and Angelina Jolie. However, after a drop in sales and a loss of market share to smartphone manufacturers, BlackBerry stopped selling phones in 2016 and preferred to focus on software and services for businesses. This decision led to a recovery, thanks to two acquisitions it made in the previous decade: a car operating system called QNX and the encryption software Secusmart, which is in service with governments and banks around the world.
The company acquired QNX in 2010 for $200 million, and four years later acquired the German Secusmart. QNX technology, which is also used in robotics, medical devices, and in the fields of aviation and security, now represents about half of the company's revenues — $72.3 million out of a total figure of $121.7 million.
"QNX is a hit. We have moved from a transition period to a growth period," said BlackBerry CEO John Chen.
The acquisition of Secusmart, which develops anti-eavesdropping software, proved to be just as successful, thanks to the geopolitical tension that pushed many countries to increase security spending. The company provides encrypted voice, text, and messaging services that meet NATO standards for 20 governments around the world. According to the CEO, the company's technology is already everywhere, without people knowing it. "Almost every car manufacturer in the world uses BlackBerry today," he said, "and we are seeing a wider adoption rate in future models of cars produced in China, Europe, and North America as well."
BlackBerry's transformation is very reminiscent of that of Nokia, the competing phone manufacturer that also collapsed during that same period. Today, the Finnish Nokia serves as a hardware provider for cloud computing centers and server farms. Nvidia even announced last October its intention to invest $1 billion in the renewed company.
