BlackBerry – Horrible hybrid.

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More experimentation produces no improvement. 

• Yet another experiment that looks almost certain to fail, should begin to hammer home the reality that BlackBerry has no future in hardware.
• This time BlackBerry has taken a regular Android device and fitted it with a slide out keyboard which is expected to launch to the four major US operators in November (see here).
• All of the indications are that this will be a Google Android device meaning that BlackBerry will be forced to put the core Google ecosystem services in the foreground with its own services being relegated to the background.
• In effect BlackBerry would be launching a commodity device with a hardware innovation that the smartphone buying market clearly no longer cares about.
• The real value in BlackBerry is in its highly secured email service, its device management service (BlackBerry Enterprise Server) and its overall reputation for enterprise class security.
• A large number of tests and hacks have shown that Android is extremely insecure meaning that in the best instance BlackBerry is putting its reputation for security at risk.
• Furthermore, I very much doubt that this device will be anything more than an oddity as users are now very accustomed to typing on touch screens and don’t really require physical keyboards anymore.
• I think that experiments like this and the Passport clearly indicate that BlackBerry should stop making hardware and instead focus on BES as a highly secure system for the mobilisation of enterprise data.
• The provision of secure mobilisation is very competitive with MobileIron, AirWatch, Microsoft and Good all with offerings but it is a segment where BlackBerry is differentiated.
• Furthermore, I still believe that it has far more installations of its server than any of the others (except Microsoft) and this is a customer base that BlackBerry should be focused on making the most of.
• I suspect that the problem is that giving up in hardware will put a 40% dent in the revenue of the company which is likely to be poorly received even if profits go up as a result.
• BlackBerry began life as a software company and really only started making hardware because it could not convince anyone to include its technology on their devices.
• That need is now long gone and I think that investors would be best served by recognising that fact and focusing on exclusively on software and services.
• Until it does, I think that good news from software will continue to be marred by bad news in hardware and that the stock will continue to underperform.
• I would prefer Microsoft, Samsung or Google to BlackBerry.