Blackberry Admits Defeat, Renews Focus on Enterprise

by Matt Klassen on April 17, 2014

It was news so minor that it barely made a blip on the tech media radar, but as Wired writer Issie Lapowsky puts it, purchasing a minority stake health tech start-up NantHealth this week may be the first good idea that Blackberry has had in years.

Truly its hard to fathom the missteps, poor decisions, and even blind arrogance the once mighty Waterloo (can I even say that anymore?) tech giant has made over the last few years, having watched its mobile kingdom collapse around its ears as it stubbornly continued to enact its failed mobile strategy.

So why is purchasing a minority stake in a small health tech company a shrewd move for Blackberry? As Lapowsky explains, the investment “is a promising sign that BlackBerry is doubling down on niche markets — the one place where demand for its technology still exists.” Simply put, we might finally be witnessing a turning point for Blackberry: the long overdue realization that it can’t compete with Android or iOS that has prompted the company to focus on the one place it still has a chance to make an impact: enterprise.

As I mentioned, over the last decade we have been witness to a precipitous fall from grace by the once great tech company. During that span Blackberry somehow managed to not only lose its early lead in the smartphone sector, but to lose the vast majority of its market share altogether. The company’s decisions, notably Blackberry 10, have failed so miserably that the Blackberry’s hardware sales now only account for one-third of its total revenue, down from 61 percent only a year ago.

New Blackberry CEO John Chen recently offered his own blunt assessment of his company’s position: “I’m losing money and burning cash.”

It’s in this light of Blackberry’s unenviable position in the market that makes the news of its investment in NantHealth so interesting, as it might just be the first fledgling steps in the company’s new direction; a direction that the tech world has known it needs to take for several years now.

By investing in healthcare technology Blackberry is sending a message that its battle with Android and iOS is over, Blackberry has lost, and while the company has fooled itself into thinking there’s still hope, there isn’t…so let’s move on. According to Reuters, Blackberry is teaming up with NantHealth to create a smartphone-like device tailored specifically to the healthcare sector specially made to view CT scans and 3-D images.

“Healthcare is one of the key industries in which we have unique advantages and this investment reflects our commitment to maximize our opportunities there,” said Chen in a statement. Those advantages are, of course, Blackberry’s reputation for strong security and its useful suite of messaging tools, strengths, Chen hopes, will make Blackberry a strong candidate in more regulated spaces like healthcare, financial services, and perhaps even government agencies.

John [Chen] is saying, ‘I have assets here. There are market opportunities out there. Let me structure a company that fits those markets, rather than getting caught up with what worked in the past,’” says Gartner mobile and wireless analyst Ken Dulaney.

This rebranding, if we can call it that yet, will turn Blackberry into a specialized mobile vendor, a company who is able to offer the enterprise sector uniquely tailored mobile solutions instead of the one-size-fits-all approach of the consumer market. While it remains to be seen whether such a strategy has any chance to compete with the established BYOD movement (a trend that signaled Blackberry’s original demise), this at least serves as notice that Blackberry still thinks there’s hope, however misplaced it still might be.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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