Rising concerns over security give Blackberry a leg up: CEO
Blackberry Ltd. has not been negatively affected by Canada’s role in the dispute between the U.S. and China, nor does it plan to pull away from doing business in Asia in light of high tensions around Huawei Technologies Co., chief executive John Chen said Thursday.
Rather, Chen said Blackberry’s reputation for security gives it an advantage at times of heightened concerns over security and surveillance, be it by state actors or criminal entities.
“Because of our heritage, people tend to like to work with us on highly secure stuff,” Chen said in an interview with reporters after Blackberry reported its quarterly financial results.
The Waterloo, Ont.-based company has managed to keep its high-security reputation even as it shifts from smartphones to self-driving technology and enterprise software. Security may become even more important to Blackberry as it expands its self-driving technology, an area where vulnerability to hacking could put drivers and passengers in serious danger.
Revenue from hand-held devices fell to a negligible level in the three months ended Nov. 30 — the first time Blackberry hasn’t reported any earnings from making its own devices, though it still receives loyalties for licensing its brand name to other manufacturers. But revenue from its auto division jumped more than 20 per cent to US$53 million.
Part of the boost in auto revenues stem from a partnership with Chinese internet search giant Baidu Inc. to develop connected car technology.
While less than 10 per cent of Blackberry’s revenue comes from Asia, its stock price soared when it announced the deal with Baidu in early 2018.
Baidu, which created an autonomous driving platform called Apollo, has partnered with more than 70 automotive manufacturers, suppliers and developers around the world. Blackberry also invests heavily in the auto sector in Korea and Japan.
Chen has no plans to change Blackberry’s long-term strategy based on current events, and said he’s optimistic the governments involved will resolve their problems. Chen’s long-term goal is to embed Blackberry’s security software into devices used for the Internet of Things. To beef up its security offerings, Blackberry bought cybersecurity company Cylance Inc. for US$1.4 billion in November.
As it stands, the majority of Blackberry’s $226 million in revenue comes from enterprise software deals, for which it earned $96 million in its latest quarter. Its earnings beat analysts’ estimates thanks to growth at QNX, the division behind the auto software being used in more than 120 million vehicles, according to Blackberry.
Blackberry reported a profit of $59 million in the quarter, up from a loss of $275 million a year prior. It reiterated its outlook for fiscal 2019, predicting total software and services revenue growth from 8 to 10 per cent. Its stock price rose 2.7 per cent on the Toronto Stock Exchange to close at $10.19.