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Its software and services segment still faces tough challengers in the cybersecurity market, and its widely hyped automotive partnerships probably won't significantly move the needle. Where will BlackBerry be in five years?īlackBerry deserves credit for stabilizing its business before it plunged off a cliff, but investors shouldn't expect it to evolve into a high-growth tech company within the next five years. The volatile expansion of this business might temporarily offset the slower growth of its software and services segment, but it's not a reliable growth engine yet.
Those moves all indicate BlackBerry will continue to streamline and expand its licensing business, but its growing reputation as a "patent troll" could persist as it sues even more companies. It also recently secured a new smartphone licensing deal with the start-up Onward Mobility, with the help of Foxconn, to continue producing BlackBerry-branded phones after the expiration of a previous partnership with the Chinese phone maker TCL.
That same month, BlackBerry sold some of its older patents to the Chinese tech giant Huawei. These partnerships will presumably strengthen BlackBerry's software and services segment, but I have two major concerns. But BlackBerry still has a lot to proveīlackBerry recently revealed new or expanded partnerships with Amazon Web Services (AWS), Baidu, and several automakers to integrate QNX into their next-gen systems for connected and driverless cars. But next year, they expect its revenue to rise 9% as the pandemic abates, auto sales recover, and demand for Spark's services warms up again.
However, analysts expect BlackBerry's revenue to decline 14% in fiscal 2021 as it laps the Cylance acquisition and struggles with the slower production of QNX-powered vehicles throughout the pandemic. It also generated higher licensing revenue throughout the year. It also earns licensing fees for discontinued brands that were licensed to other companies, including its eponymous smartphone division and the BBM (BlackBerry Messenger) Consumer app.īlackBerry's revenue rose 15% in fiscal 2020, but most of that growth came from its acquisition of the cybersecurity firm Cylance, which was subsequently integrated into Spark. Its licensing and other segment, which generated the remaining third of its revenue in the first nine months, mainly charges licensing fees on thousands of patents. Its shares also briefly hit a nine-year high of $25.10 this January amid the Reddit-fueled short squeezes, but those gains quickly evaporated. But BlackBerry's annual revenue growth finally turned positive again in fiscal 2020, which ended last February. That turnaround, which was buoyed by big investments and acquisitions, was a grueling process. Chen then leveraged BlackBerry's reputation in enterprise security to expand its software and services segments. Instead of trying to revive the BlackBerry's dying smartphone business, Chen phased out the unit and licensed its brand to third-party smartphone makers. By the time John Chen took over as CEO in 2013, the Canadian tech company had become a desiccated husk of its former self.
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Follow him on Twitter for more updates!įollow ( NYSE:BB) brand was once synonymous with smartphones, but its heyday ended after iPhones and Android devices split the market. His wheelhouse includes cloud, IoT, analytics, telecom, and gaming related businesses. Leo is a tech and consumer goods specialist who has covered the crossroads of Wall Street and Silicon Valley since 2012.
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