The ill-fated PlayBook, released in April 2011, was the only tablet device built by BlackBerry. Although the hardware was considered to be good, the mini tablet got mixed reviews. Three years later, some 2.5 million units of the device had been shipped, although BlackBerry had to offer most of it at very deep discount. Then BlackBerry CEO Thorsten Heins also pulled the plug on the device saying in an interview that he felt “in five years I don’t think there’ll be a reason to have a tablet anymore.”
Last week, BlackBerry CEO John Chen spoke to analysts via conference call. He spoke about the company’s fiscal fourth quarter earnings, its licensing strategy, and then appeared to tease about what could be PlayBook 2.
“One of our partners is very excited to build a tablet based on Android, and so they wanted us to give them the portfolio rights to do that,” he said. “I’m interested to do that because I’m going to get royalties for every tablet they ship.”
Chen, however, did not provide and further details.
“I will just leave it at that, and it’s not even that, we have to curate it, we have to do a lot of things on with it, so it’s not a 100 per cent committed thing but it’s gonna come from our partners and BlackBerry will only receive royalty but it’s using our software and we do the QA and portfolio management, so I hope that clarifies that point,” he said.
Part of Chen’s turnaround strategy for BlackBerry is to shift the company’s focus from mobile hardware manufacturing to software development. After creating the smartphone segment and being in it for more than 14 years, BlackBerry announced in 2016 that it would stop building mobile phones and license out its name to other manufacturers.
The first phase of BlackBerry’s strategy, announced in September 2016, was focused on providing the most secure and comprehensive Android software for smartphones around the world manufactured and marketed by TCL Communication, PT BB Merah Putih, and Optiemus Infracom Ltd.
BlackBerry Q4 2017
Chen’s report last week appears to show some momentum in this strategy.
He said the company ended the quarter in a cash position of $1.7 billion – way ahead of the previous quarter’s $89 million.
“I am pleased to report that our fourth quarter results came in at or above expectations in all major metrics,” said Chen. “In the quarter, we continued to grow our mix of software and services revenue across the company.”
The software-service mix will allow BlackBerry to expand its operating margin and report positive cash flow, he said.
“…our balance sheet continues to strengthen and benefit from reduced capital requirements with our focus on software and licensing,” Chen added.
Licensing, wearables, and IoT
BlackBerry is now into the second phase of its licensing strategy which focuses on pursuing additional endpoints which could include tablets, wearables, medical devices, appliances, point-of-sale terminals and other smartphones.
Chen said he sees huge opportunities in connected devices, especially in the healthcare sector. However, to achieve the full potential of the Internet of Things, privacy and security must be embedded in every endpoint from the onset, he said.
“For example, companies providing medical monitoring devices must protect health data on the device, guarantee it connects securely to the healthcare system, and most importantly ensure that it cannot be hacked, BlackBerry Secure helps solve this triple threat,” said Chen.”We have taken a long-term and thoughtful approach to our licensing strategy, which includes an expansive view of the entire Enterprise of Things ecosystem. As part of this strategy, we will work with a wide range of manufacturers to integrate BlackBerry Secure software into both BlackBerry-branded and co-branded devices.”
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