Blackberry Moves Non-Handset Divisions Into New Business Unit

First time accepted submitter BarbaraHudson (3785311) writes The CBC is reporting that Blackberry has made preparations to abandon the phone market by spinning pieces of the business off into Blackberry Technology Solutions. From the article: "The unit ... includes QNX, the company that BlackBerry acquired and used to develop the operating system that became the platform for its new smartphones, and Certicom, a former independent Toronto-area company with advanced security software. BTS will also include BlackBerry's Project Ion, which is an application platform focused on machine-to-machine Internet technology, Paratek antenna tuning technology and about 44,000 patents." When you have less market share than Windows Phone, it's time to throw in the towel ... or as they say in the new "lets not admit we screwed up" vernacular, "pivot to take advantage of new opportunities."

Comments

Looks like some editorializing by the submitter

[hyades1]

I read TFA, and saw nothing about Blackberry supposedly trying to spin a screw-up as anything else. And I heard one of CBC's tech people discuss this move on CBC Radio 1 today. Again, there was nothing about Blackberry throwing in the towel, even on its handsets. In fact, the new one was reported to be garnering a fair bit of positive feedback. I have no idea whether that's true or not, but that is what was reported on CBC.

I'm not a Blackberry fanboi by any stretch of the imagination, in fact, my current and former phones are Samsung, but the summary offered above is dishonest...plain and simple.

Re:Looks like some editorializing by the submitter

[kamapuaa]

BlackBerry Ltd. has created a new business unit that will combine some of its most innovative technology and patent portfolio as the company focuses away from handheld devices[....]

Independent technology analyst Carmi Levy said the new unit reinforces the fact that Blackberry's days primarily as a handset vendor are behind it as it moves "very aggressively" toward a different business. "This is probably the most tangible evidence yet of the company's transition into something very different than it was even a year or two ago," Levy said.

Re:Looks like some editorializing by the submitter

[sixoh1]

Ehh, a bit adhomenim for my tastes. TFA makes a bit point about how important "IP" is to the new outfit. In the CEO's own words "...people don't give us credit..." which is code for - we're not making enough money from selling hardware, and lookie here at all these wonderful patents we can use to generate licenses fees or sell as an asset.

Re:Looks like some editorializing by the submitter

[hyades1]

The summary is inaccurate from the first sentence on. There's a difference between "shifting focus" and "abandoning the market", even in the euphemistic language of business PR types. And the transition Levy was talking about was to a focus on business applications and away from general public, except in certain markets.

Re:Looks like some editorializing by the submitter

[unimacs]

I think the market has pretty much abandoned them. They started the year with a market share of a few percentage points in the US, now it's less than .5 percent.

It's hard to survive as a platform if the market isn't big enough to justify 3rd party development. Yes I know it can run Android apps, - sort of. The reality simply may be that they can not get enough traction and sell enough units to justify the R&D it takes to turn out decent hardware and software. Lots of good PC operating systems died when Microsoft was dominating the PC market, - not because they weren't good but because developers didn't want to waste their time on a minuscule market.

Call it shifting focus if you want, but the writing is on the wall and has been for awhile. Now we are beginning to see the signs that BlackBerry knows it too.

Re:Looks like some editorializing by the submitter

[hyades1]

Thank you, my friend. As I noted in my original post, I'm no Blackberry fanboi. But I suspect a lot of the hatred coming from trolls on just about every tech site you can find has more to do with interested parties trying to drive down the company's value than from honest criticism.

Re:Looks like some editorializing by the submitter

[theshowmecanuck]

Missed the market shift? No, they pulled a Novell. They got too big for their britches and assumed because they were number one, they could dictate how things should be. They stopped innovating and became relatively stagnant. Meanwhile others went around them and delivered stuff that the market wanted and before they knew it, they weren't number one any more. I call anything like this Novell Syndrome.

Re:Looks like some editorializing by the submitter

[Barsteward]

you should read the article you posted again (and again) until you understand it fully. you appear to be a shill against blackberry

Re:Looks like some editorializing by the submitter

[hyades1]

Please stay with the subject. Due to some unusual circumstances, I personally heard and read everything CBC reported on Blackberry yesterday. Your summary of what THEY said was not just inaccurate, it was deceitfully inaccurate.

You can thrash around all you want. The fact remains: you attempted to mislead members of this community. I have no idea why, and I couldn't care less. You are dishonest. Any further submissions by you should receive close scrutiny by Slashdot's editors.

Re:Looks like some editorializing by the submitter

[davester666]

they also were way behind on basic research into components. When the iPhone was first announced, RIM's engineers actually thought Apple was lying about the specs, that Apple couldn't get a touch screen at that resolution, with that much RAM and storage and CPU and GPU and radios, in that physical size, with a battery that would last as long as Apple claimed.

Re:Looks like some editorializing by the submitter

[dunkelfalke]

Sorry, but this is difficult to believe. iPhone specs weren't anything special. In fact, high end WM phones had better hardware.

Re:Looks like some editorializing by the submitter

[BarbaraHudson]

I'm far from a "shill against blackberry." As a Canadian, I wanted them to continue their success. However, the writing was on the wall the day they caved in to Saudi Arabia and allowed government access to (and decryption of) user's secure messages.

You can't screw over your customers and not expect people to start looking at alternatives.

I considered a blackberry earlier this year, but it was so off the mainstream that I said to heck with it. If Blackberry had gone to android instead of qnx, I would probably have bought one just to encourage them, but there's no way that I'm going to buy something that's virtually an orphan. And everyone I know who loved their crackberries has switched. Judging by their market share, this is now an all-too-common occurrence.

Re:Looks like some editorializing by the submitter

[BarbaraHudson]

The CBC story is just a part of the whole story. But if you read the story on the CBC web site (which I linked to) , it includes the following:

Independent technology analyst Carmi Levy said the new unit reinforces the fact that Blackberry's days primarily as a handset vendor are behind it as it moves "very aggressively" toward a different business.

"This is probably the most tangible evidence yet of the company's transition into something very different than it was even a year or two ago," Levy said.

"It suggests they are no longer as dependent on handset-based revenue as they once were and as a result they have both the financial foundation as well as the corporate organizational confidence to more concretely move away from those lines of businesses into areas that are largely based on its intellectual property."

He said the move was positive for Blackberry, noting that it has struggled with its product launches and faced stiff competition from other smartphone makers while it has received little credit for its range of capabilities, especially when it came to software.

We've seen this story before - a company decides to concentrate on software and services, and sells off their hardware lines. IBM and Lenovo with PCs, and now with servers, should ring a bell.

Blackberry moving all their IP into a separate business unit is the logical way to get ready to sell off their phone division for the maximum return. People have known for years that Blackberry was in trouble. Just look at their market share (but you might need a microscope - it's worse than WinPhone). Everyone I know who had a crackberry has switched away. It's why blackberry took $965 million in writedowns on their unsold inventory of Z10 phones. They can't even sell them at cost.

Or you might want to read what the Globe and Mail had to say almost a year ago in "Inside the fall of BlackBerry: How the smartphone inventor failed to adapt." Here's just a part of it:

But smartphone users were rapidly shifting their focus to software applications, rather than choosing devices based solely on hardware. RIM found it difficult to make the transition, said Neeraj Monga, director of research with Veritas Investment Research Corp. The company’s engineering culture had served it well when it delivered efficient, low-power devices to enterprise customers. But features that suited corporate chief information officers weren’t what appealed to the general public.

“The problem wasn’t that we stopped listening to customers,” said one former RIM insider. “We believed we knew better what customers needed long term than they did. Consumers would say, ‘I want a faster browser.’ We might say, ‘You might think you want a faster browser, but you don’t want to pay overage on your bill.’ ‘Well, I want a super big very responsive touchscreen.’ ‘Well, you might think you want that, but you don’t want your phone to die at 2 p.m.’ “We would say, ‘We know better, and they’ll eventually figure it out.’ ”

Trying to satisfy its two sets of customers – consumers and corporate users – could leave the company satisfying neither. When RIM executives showed off plans to add camera, game and music applications to its products to several hundred Fortune 500 chief information officers at a company event in Orlando in 2010, they weren’t prepared for the backlash that followed. Large corporate customers didn’t want personal applications on corporate phones, said a former RIM executive who attended the session.

Meanwhile, it turned out consumers didn’t care so much about battery life or security features. They wanted apps. Apple’s iOs and Google’s A

Re:Looks like some editorializing by the submitter

[unimacs]

In my opinion, in order for Blackberry to succeed in the phone market as a unique platform (not another android device), they have to have hardware and software that is head and shoulders above Android and iOS. Their phones would have to have features that neither of the others have, nor are they likely to get in the near future, - something big enough to excite customers that would take competitors a couple of years to catch up to.

It would have to be long enough for developers to decide they can't wait for Apple and Google to catch up and would have to write apps for Blackberry.

I just don't see that happening. They may come up with a nice feature or two that the competition doesn't have yet, but it's unlikely to be enticing enough to lure many people away from all the apps available on iPhones and Androids. How long can Blackberry continue to sink large sums of money into R & D that doesn't result in enough sales to sustain it?

Re:Looks like some editorializing by the submitter

[BarbaraHudson]

It's not a question of hating. The first link shows that shipments rose for the first time, to 1.5 million units a quarter.

Some perspective

Android and iOS accounted for 96.4 percent of all smartphone shipments in Q2 2014, leaving even less for the competition as the Google-Apple duopoly hit a new high. Android grew its share to 84.7 market share, while iOS fell to 11.7 percent, Windows Phone slipped to 2.5 percent, and BlackBerry tanked to 0.5 percent.

Even Windows Phone is selling 5x as many phones as Blackberry, and people are questioning the long-term viability of WinPhone.

And "Blackberry Shares Lead TSX". Come off it - if you read the article, it had nothing to do with phones:

The tech sector led advancers with BlackBerry Ltd. ahead 14 cents to $10.61 (Canadian) as the company said that it has created a new business unit that will combine some of its most innovative technology, including QNX embedded software, Certicom cryptography applications and its patent portfolio.

The story on blackberry buying the German security firm is more of the same - moving away from phone manufacturing and into software and services. And it's market cap? 5.6 billion, a far cry from the peak of 83 billion.

If blackberry believed phones were its future, it wouldn't be making the moves it is. If investors believed blackberry's phones had any sort of future, they wouldn't be rewarding the company with a higher stock evaluation for moving away from phones as a core business. The sales numbers have spoken. That can't be faked or argued. We're into a smartphone duopoly - android and iOS - and android is winning.

Re:Looks like some editorializing by the submitter

[Cealestis]

You're just drawing conclusions and without precedent. The article is slanted, your summary is just misleading. We all know they made mistakes, media has that one down. Now their downsizing (not news). and this article shows they're diversifying (not surprising). Why bother post this at all? If they sell off their handset line, that would be news. This is just good business.

Re:Looks like some editorializing by the submitter

[BarbaraHudson]

You're just drawing conclusions and without precedent.

That sentence doesn't parse. If you meant "without justification", there's plenty of justification - and actually no other conclusion is possible given the facts. Their handset operation's bleeding them dry, and both they and investors know it. The $965 million loss on the writedown of the Z10 inventory shows just how "out of touch" Blackberry is with what the market wants in a smartphone. The creation of a new business unit that houses all the IP but does not have a thing to do with manufacturing smartphones, and their newfound zeal for this as the way to survive and prosper, should tell anyone thinking of buying a blackberry that they will not be able to afford devoting resources into making new phones in the future.

This is a company who sold fewer phones last year than in 2008. The market has exploded since 2008, and it doesn't want what Blackberry is offering. Their global market share is half of one percent, and expected to drop even further in the future. Obvious inference - they'll sell off the phone division now that the IP is protected elsewhere in the business. There's no business case to keep a legacy business that's bleeding cash when you can flip it.

The only risk is that they'll do like GM tried to do with the Hummer brand - ask a ridiculous amount of money, and end up getting nothing for it. More likely scenario is selling it, but keeping some equity in the new venture, to keep the cash price down. Now, if you can make a business case that argues contrary to this, and sees them continuing to be a phone manufacturer past 2018, go ahead.

Re:Looks like some editorializing by the submitter

[davester666]

back then it wasn't. other phones at the time might have had better specs on specific items, nobody was making a similar item, particularly with those physical dimensions.

http://appleinsider.com/articles/10/12/27/rim_thought_apple_was_lying_about_original_iphone_in_2007.html

or google for other articles.

Re:Looks like some editorializing by the submitter

[davester666]

Yes, that's exactly why nobody buys iPhones [all models]. The technical specs are inferior to competing devices.

Anyway, your 2005 HTC Universal dimensions (from http://www.jawal123.com/-1108609633/en-us/htc-universal)
128mm × 81mm × 25 mm = 259 cubic centimeters

2007 iPhone dimensions (from https://en.wikipedia.org/wiki/IPhone)
115x61x11.6mm = 81.3 cubic centimeters

less than 1/3 the volume of your HTC Universal

that's why RIM's engineers couldn't believe. Stuffing that much stuff in that small a package, nevermind the software.

Re:Looks like some editorializing by the submitter

[ClaymoreZA]

The BB10 app Snap is a Google Play Store app for Blackberry, and it works just fine. Of course, there are other app stores too - Amazon (which will ship with OS 10.3), 1Mobile, Goodereader, et al.

Re:Looks like some editorializing by the submitter

[hyades1]

Quit trying to change the subject. You attempted to use the CBC, which has a decent reputation for reporting tech intelligently and without bias, to lend spurious legitimacy to your own deceitful, misleading summary.

And quit repeating Levi's comment as though your original summary didn't misrepresent what he said.

I don't know what your issue is with Blackberry, and I couldn't care less. What I DO care about is that you're a liar who attempted to deceive Slashdot readers. I hope the people running the site ensure that any future posts by you are carefully audited for deceitful and misleading content.

Now quit wasting my time.

RIM is dead, long live RIM's patents

[sixoh1]

Let the race to purchase their Patent portfolio begin!

Who might have enough cash to purchase the biggest stick in the phone wars? Apple or Samsung. Like the highlander it seems there can be only one... then again the Highlander kept having sequels so we might see this fight again and again (yuck).

Re:RIM is dead, long live RIM's patents

[davester666]

what stick?

RIM's been trying to peddle these patents for licensing money for ages. anybody who thinks they might be of use probably already has a license quite cheap, because RIM has been desperate for any cash for quite some time.

Re:Moving valuable assets into one division will h

[narcc]

Blackberry: Gone in a year since 2010

Their demise, I presume, will coincide with the year of the Linux desktop and strong AI.

return the bonuses!!

[snemiro]

Maybe now is time for the executives to return the bonuses and share them with the employees....it looks like they didn't do a great job after all.....

Re:BarbaraHudson is an absolute idiot

[PapayaSF]

Time to throw in the towel when it's the first time in years the company is making a profit? Why the fuck would BlackBerry want to do that?

Because it's the first time in years the company is making a profit? Won't that mean they'd get more for it?

Yes, people have been predicting doom for Blackberry for a while, but it's hard to see some big turnaround on the horizon, with millions of people abandoning Apple and Android.

(My, how times change. The first iPhone came out a little over seven years ago, to widespread mockery: "It has no keyboard!" "It's too expensive!" "Businesses and government will never abandon their Blackberries!" And now Blackberry is a shadow of it's former self, and we're arguing whether they're totally doomed or not....)

Yes BarbaraHudson is an absolute idiot

[Anonymous Coward]

Plus a multiple sockpuppet account using fraudster on slashdot + known admitted troll http://news.slashdot.org/comme...

Re:Yes BarbaraHudson is an absolute idiot

[hyades1]

Thanks for that. I'm not used to seeing Slashdot submitters who are outright liars.

The thing is, I happened to be home today, so I heard everything CBC had to say about this story, and I read what they put up on their site, too. Sock Puppet BarbaraHudson's summary simply did not match what was reported. It did, however, bear a close enough resemblance to make it obvious the deception was not accidental.

Re:BarbaraHudson is an absolute idiot

[Anonymous Coward]

Might I suggest that it's a business, not a tv movie. At least for the short term, the only benchmark is profitability not market dominance with all the stars laughing at the end.

What makes a viable business? Must valuations be 300 or more billions?

In all of these Blackberry analyses, is the rest of the world (outside of the US) not enough to bank on a specific strategy? Could they leverage their other IPs to build a business. I don't know.

I'm generally surprised that the critques never delve into why the capital and the IP that Blackberry possesses could be worked into a profitable business. Is it lack of imagination? Moreover, it appears that they have actively worked to restructure and trim costs. Yes, that means cutting the workforce. Did they cut more than fat, maybe. If you're going to say that the company is going to tank then that implies a reasonably thorough analyses, of some form. So, let's hear it. [I have done zero analyses so for me it could go either way.]

Yes, it's a shadow of its former self but do they now have the conditions to rebuilt (in whatever way)? Pretend that you're not holding onto convenient conclusions - or susceptible to confirmation bias.

Genuinely curious about the superficial prognostications (and what those imply about the posters).

Re:Moving valuable assets into one division will h

[JoeyRox]

I suppose it depends on how one defines "gone". If living in hospice is considered living then I guess they're surviving.

Blackberry Android Phone with Physical Keyboard

[BBF_BBF]

Please, please, please. Pretty please with a cherry on top?

All the android makers have abandoned the high end keyboard phone. It's a niche that needs filling. It's not going to reinvigorate the handset side of the company, but would help pay some bills with minimal investment.

Re:Moving valuable assets into one division will h

[ClaymoreZA]

I think .5 is the US market share, not global. In many countries, they have significant market share. In South Africa, for example, they're just behind Samsung, with 5-10 times Apple's market share. It's similar in places like Indonesia. Also, market share is not the whole story. They have devices and software in some very influential areas - most of the G20 governments, and most leading companies in certain markets.

Re:BTS

[Barsteward]

because.... BS

Re:Moving valuable assets into one division will h

[Barsteward]

so fucking what? having percentage points of a market is just a pissing contest. Apple had a low percentage of the desktop market for years and they didn't really care about it because they were making more than enough money and had a good bank balance.

Re:BarbaraHudson is an absolute idiot

[necro81]

My, how times change. The first iPhone came out a little over seven years ago, to widespread mockery: "It has no keyboard!" "It's too expensive!" "Businesses and government will never abandon their Blackberries!" And now Blackberry is a shadow of it's former self, and we're arguing whether they're totally doomed or not....

Well, this is slashdot - what else are we supposed to do? If we weren't griping, sniping, and tearing everything down, we might actually go out and create something freakin' amazing!

Re:BarbaraHudson (3785311) you are a troll

[ifdef]

Okay, you've made your point. There's no reason to keep repeating it. We understand that you can prove that the submitter is deceitful, etc., etc.

Now can we please get on to discussing content and ideas?

Re:You're multiple sockpuppet account using scum

[BarbaraHudson]

Poor APK. Still doing everything he can (which ain't much).

Sure I'm playing with android. Given the choice of developing for blackberry or android, why would I play with a phone that's got almost zero market share?

What killed Blackberry: Terrible apps.

Many of the most popular apps on the iPhone and Android are nowhere to be found. There's no Instagram, Netflix (NFLX), Candy Crush or Google (GOOG) Maps. Many of the big-brand apps that do exist for BlackBerry, including Facebook, Twitter and WhatsApp, are infrequently updated and have received dismal reviews from users.

Meanwhile, BlackBerry news site BerryReview revealed last month that a single developer is responsible for 48,000, or 40%, of BlackBerry's apps. Some of those apps developed by Hong Kong outfit S4BB many seem legit and functional. But many of them are either generic clones of other apps or possess minimal usefulness.

... and ...

BlackBerry is also rapidly losing subscribers, so big app makers don't want to devote resources to a vanishing platform. But BlackBerry also gives free rein to small developers to fill its app store with spam apps.

Although the open-ended strategy may be mildly beneficial to BlackBerry and a few ambitious developers in the short term, encouraging such a large ratio of garbage apps to quality apps poses consequences in the long run: Smaller developers don't want to invest in BlackBerry, because it it's hard for consumers to stumble upon their apps in a diluted pool.

BlackBerry isn't a "competitor" to anybody any more. They sold fewer phones last year than in 2008. And worse ...

analysts remained sceptical about the future of the firm formerly known as Research in Motion. "If you wouldn't lend money to buy BlackBerry, why would you lend money to BlackBerry?" queried Benedict Evans, of Enders Analysis.

... and ...

One major supplier, Jabil, warned in September that it might stop building parts for the company, which could completely kill off the handset business.

When such a critical supplier says they're thinking of bailing, there's no way to spin it.

Re:How many sockpuppet alterego accounts

[BarbaraHudson]

The editors can check the accounts you named - they haven't been active for several years. Go on, ask them to, APK.

Oh wait, you can't. You've been perma-banned and have to troll anonymously via proxies. And "those other users who tore me apart?" Everyone knows it's you, again posting anonymously, because I tore apart your stupid hosts file crapola. BTW - why would anyone dare to use a hosts file that is produced by you? After all, you post anonymously, and one way to monetize your hosts file is to put a few bogus entries in that go to bogus "monetizing" sites. Who has independently vetted it? Nobody.

no need for the "B" either

[swschrad]

just rename the company Canadian Reliability And Progress, and use the obvious ticker acronym in the markets.