The turnaround of the onetime leader of the mobile phone industry – BlackBerry, is apparently going on well, as it attempts to now become a leader in cybersecurity software and connected cars.
Software and services account for over 90% of its total revenue of the company currently. And the firm claims that of that, repeat deals and purchases accounts for 80%. This means that the fickle tastes of consumers can no longer influence the capacity of the company to generate sale revenues as the company now has a host of corporate customers.
The profits reported by BlackBerry for the latest quarter was over and above the expectations of Wall Street. There was 15% uptick in the share prices following the profit reporting.
According to company CEO John Chen, connected and autonomous car market were the biggest drivers for revenues for the company this quarter as both the market segments registered revenues growth of about 30% and the business includes QNX software business for cars.
There is a conscious effort on the p[art of the company to win over new customers and clients in the automotive market, Chen said. He referred to a January deal that was announced by the company of a tie up with Chinese search engine giant Baidu for the development of self-driving cars.
It was about a few years ago that BlackBerry brought in a strategic change in its business outlook under Chen as the company decided to move away from the business of making devices which brought in very little margins in a market that is overwhelmingly dominated by the likes of Apple and Samsung.
In 2016, the company stopped manufacturing its own smartphones and outsource the production of devices with the BlackBerry name on them to other manufacturers.
The company has since then diverted its complete focus on software.
BlackBerry hopes that its new Spark security platform which has been described as instant messaging on steroids, would be able to find more clients in the health care market, Chen said. Video chat, texts and other forms media are integrated together in Spark.
The health care segment is the new target for BlackBerry because it is now attempting to expand beyond its core market segments of transportation, governments and financial services companies.
This transformation of the company has been welcomed by investors. In the last five years, since Chen came at the helm of the firm, its shares have risen by over 60%. However, the company has lagged behind in performance to Apple as well as the Nasdaq.
Despite this , the company \now has a good balance sheet with about $2.4 billion in cash and just $740 million in long-term debt. There is no longer any rumor of the company going out of business.
(Adapted from Money.CNN.com)