BlackBerry (BBRY), the Canadian phone giant, hasn’t seen a good time in the past few years as it saw its stocks drop from the record high of $140 a share in 2008 to its present-day penny valuation. With a lot of effort, the company finally seems to have the right combination of offerings that can again turn its fortunes.
The legendary phone maker is making a gradual shift from being a hardware company to a software and security company, thus changing everything we knew about the company. However, this recent development may pose as a threat to the possibly improving future of the Canadian giant. Let’s take a look at what’s going on.
Boeing - The new threat to BlackBerry
Yes. That’s correct! The famous aircraft maker, Boeing (BA) has decided to set its foot on the smartphone space with emphasis on the keyword “security”. That’s BlackBerry’s forte, right? Well, so far that’s been the way, but the future depends upon how well Boeing launches and markets its new “Boeing Black” phone and what security it provides over BlackBerry. Many industry experts are of the opinion that the Boeing Black can prove to be a fatal competitor for the ruling security giant. Why and how? The answer lies in the features of Boeing’s offering.
The self-destruct Boeing Black
The key feature of the Black is that it has a self-destruct option, something we expect to see in a 007 or a Mission Impossible or a Batman movie and their likes. Wow! The aircraft giant has made this device keeping in mind primarily government agencies and companies engaged in contractual activities with those agencies that are related to defense and homeland security, as understood from the recent Federal Communications Commission (FCC) filing, clearly hinting that Boeing is going after BlackBerry’s market share.
This new smartphone will be powered by none other than Google’s (GOOG) Android platform, will have dual SIM feature that will support GSM, WCDMA and LTE. Along with all this, it will have all standard features such as Wi-Fi, Bluetooth, USB, HDMI and PDMI ports and camera. And now, finally coming to the self-destruct thing I mentioned earlier. According to the FCC filing,
“There are no serviceable parts on Boeing's Black phone and any attempted servicing or replacing of parts would destroy the product. The Boeing Black phone is manufactured as a sealed device both with epoxy around the casing and with screws, the heads of which are covered with tamper proof covering to identify attempted disassembly. Any attempt to break open the casing of the device would trigger functions that would delete the data and software contained within the device and make the device inoperable.”
So, it seems Boeing is taking the security thing very seriously. Trouble for BlackBerry!
Threat only for BlackBerry?
Absolutely no! If you can remember, many of the government agencies in the recent past had opted out of BlackBerry due to its high maintenance cost and had chose to carry Apple (AAPL) iPhones instead. Even the Korean smartphone giant Samsung (SSNLF) is eying the security driven communication equipment and services space with its KNOX offering. So, even the Galaxy maker needs to look out for Boeing. Undoubtedly BlackBerry’s secured platform is the best till date, but some of the government agencies considered that of Apple’s to be good as well.
Now, if Boeing can provide an equally secured device at a lower price point, many companies working in highly regulated industries can opt for the Black phone. However, the point to be remembered is, Apple and Samsung are the leaders of the consumer focused smartphone space and Boeing’s entry into the more security driven enterprise communication devices market is going to have very minor impact on the players.
In all this, the major point of relief for BlackBerry is the fact that now it already has offerings in the $200 range on the BES 10 that provides great security and its tried and tested, where as the Boeing Black is expected to cost somewhere around $600, similar to the iPhone, and is yet to be put to test. BlackBerry has managed to bag a few good deals as well and the company can stay rest assured that these agencies will not ditch it in the near future also. The doubt is only regarding the new contracts that BlackBerry could have bagged. However, right now it’s a little too early to comment on BlackBerry’s future. May be the company will come up with something that will ensure BlackBerry’s dominance in the secured communication space. After all, necessity is the mother of all invention!