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Did BlackBerry Just Surrender to Apple and Android?

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BlackBerry (NASDAQ: BBRY  ) had a busy Tuesday, as it made a plethora of major announcements at its BlackBerry Live conference. Perhaps most interestingly, the company announced that it's bringing two of its signature features -- BlackBerry Messenger and secure device management -- to devices running Apple's (NASDAQ: AAPL  ) iOS and Google's (NASDAQ: GOOGL  ) Android.

From one perspective, these announcements seem like an admission of defeat from BlackBerry. By offering BBM and secure device management services on iOS and Android devices, BlackBerry is giving up some of its key differentiating factors vis-a-vis those platforms. However, it's also possible to see these announcements in a more positive light. By expanding its services beyond the BlackBerry platform, BlackBerry can engage new potential customers and better monetize the value of its intellectual property.

Opening up BBM
The BBM instant messaging service has long been one of BlackBerry's signature features, but its utility has been declining as BlackBerry's market share has dropped. BlackBerry wants to bolster BBM's value by making it available to iPhone and Android users; moreover, BBM will be a free app. While other cross-platform messaging systems like WhatsApp already exist, BBM has a strong base with 60 million users who send and receive 10 billion messages a day. This should help the BBM app become relatively popular.

Obviously, this move creates the risk that some BlackBerry subscribers will defect to one of the rival platforms, because they can now keep using BBM. However, the upside is much bigger, as making BBM available for free on rival platforms can expose iOS and Android users to BBM and (hopefully) rehabilitate the BlackBerry brand. If BlackBerry can persuade some iPhone users to adopt BBM rather than iMessage, it will also offset some of the platform stickiness that is BlackBerry's biggest long-term obstacle.

Eventually, BlackBerry may find a way to monetize BBM on non-BlackBerry devices. Even if it doesn't, the app will essentially provide free marketing for BlackBerry on rival platforms while also increasing the value of the BBM service for BB10 users.

Mobile device management
BlackBerry also announced on Tuesday that version 10.1 of its BlackBerry Enterprise Service was available for download. Whereas previous versions of BBES have just provided security and mobile device management for BlackBerry devices, the new version will also support iOS and Android devices.

In many ways, this is an even more important product for BlackBerry. The company has long been the leader in mobile device security, but the popularity of the iPhone and Android devices has forced governments and enterprises to find third-party solutions to secure employees' phones. The new BBES will allow companies with "bring your own device" policies to use a BlackBerry security solution running on a single server for all BlackBerry, iOS, and Android devices.

BBES 10.1 will let corporate IT departments to choose what applications are accessible to employees and will separate work and personal data on their devices. This essentially ports the "BlackBerry Balance" feature of the BB10 OS to iOS and Android.

From a business perspective, BBES could be quite lucrative as a mobile device management system. It's being positioned as a software-as-a-service offering, at $59 annually per device. Since most governments and enterprises have worked with BlackBerry (even if they now have BYOD policies), the company has an opportunity to take a leadership position in this market, which is expected to surpass $1 billion annually in the near future.

Foolish conclusion
By opening up its BlackBerry Messenger service and mobile security features to the iOS and Android platforms, BlackBerry is admitting that it's no longer a dominant player in the mobile market. However, that was already obvious from the company's shrinking market share. Supporting iOS and Android devices will allow BlackBerry to diversify away from its hardware business into new software and service opportunities. It could also help expose a new generation of consumers to the BlackBerry brand. Both of these initiatives seem like positive steps for BlackBerry's turnaround.

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Read/Post Comments (11) | Recommend This Article (9)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 15, 2013, at 11:34 PM, HelpIsHere wrote:

    No wonder AAPL is down so much this week, they are getting crushed by BlackBerry.

  • Report this Comment On May 16, 2013, at 1:07 AM, k1moops wrote:

    It is not that the people do not know Blackberry, people know Blackberry and all its products but want nothing at all to do with Blackberry. Blackberry can throw in its inept BBM and it will quickly disappear as one of 1.5 million iOS and Android apps. Blackberry can 'open up' BES 10 but nearly all significant companies have their own enterprise or private clouds.

    Blackberry is simply unwanted everywhere.

  • Report this Comment On May 16, 2013, at 6:24 AM, Mikeycollins13 wrote:

    BBM opening up+ intro BB Channels is a very aggressive land grab and is going after Skype and Twitter.

    Both Apple and Samsung are facing the hardware commoditisation downtown, with margins coming under increasing pressure...moving out of hardware to try and spin out one or two very important software businesses is showing a great deal of foresight.

    Huwei is launching a $100 smart phone, this industry is going the way of the LCD screen..$7 margins on $500 products.

    You also need to add mobile PayPal ...BBM money launched already.

  • Report this Comment On May 16, 2013, at 6:58 AM, BB104ever wrote:

    this is for k1moops, you are stating that BB10 is unwanted in the enterprise anymore, are you mentally challenged. You have no clue what you are talking about, there is no other enterprise solution that is so integrated get your facts right before you start typing. BYW if you are in IT, please quit and go work at Wendy's

  • Report this Comment On May 16, 2013, at 7:17 AM, infektu wrote:

    I didn't get the "just surrender" part.

    Did Google "surrender" to MSFT, Apple and BBRY when they made GoogleTalk available for all those platforms?

    Did MSFT surrender to Apple, Google and now BBRY when they made Skype available for those platforms?

    This funny spin aside, opening up a high-quality tool like BBM to make it visible for non-BBRY consumers looks like a smart move.

    About 85% of the Android/iOS owners never had a BB, and the ones who did, remember the BB from 2008.

    BBM voice/video/chat is the perfect example of what one trades off when moving to an Android/iOS phone.

    And if they put out a desktop version, it might take off even faster than we think.

  • Report this Comment On May 16, 2013, at 7:42 AM, greenember wrote:

    Offering BBM on iOS and Android is a brilliant move. BlackBerry has plans to use BBM for mobile payments, of which they will most definitely get a cut. Making the app free is like what Google does with Android: put the platform out there for nothing, and draw revenues from it's use rather than its sale. BBM is what WhatsApp wishes it could be. This will be huge for BlackBerry

  • Report this Comment On May 16, 2013, at 8:12 AM, CZZZZZZ wrote:

    Ever since last fall when The Fool went long APLE at $700 and short BBRY at $7 we've been listening to the most absurd and ridiculous BBRY bashing articles.

    ....this article title takes the honor of the worst I have read here, its gotten very desperate and pathetic at The Fool, can't blame you though, if I shorted BBRY and went long APLE last fall I'ld be desperate and pathetic're only putting off the inevetible, just take your losses and go long BBRY to make your money back..

  • Report this Comment On May 16, 2013, at 9:29 AM, k1moops wrote:

    Blackberry has very tiny hardware business now, and its 80 million subs had melted down to 60 million in a hurry while Blackberry is cutting subscription fee drastically to stem the bleeding. Google's many apps like Search and Maps had been free Internet community services from the onset, while Blackberry is trying to usher in BBM now to grab attention competing with fleets of professional offerings such as WebEx, Lotus, MeetingAnywhere is going to net a zero effect. BES10 managing iOS and Android sounds good but Apple and Samsung does not offer API to Blackberry to allow BES10 manipulations, again, Blackberry's unilateral push into iOS and Android is going to no avail. Blackberry is pulling out all the stops in desperation but all its cylinders are sputtering to a halt.

  • Report this Comment On May 16, 2013, at 9:51 AM, TMFGemHunter wrote:

    @CZZZZZ: Did you actually read the article? I think I made it quite clear that I think this is a good move for BlackBerry. Also, I own BBRY stock (and call options), although I do also own AAPL. "The Fool" doesn't tell us what to think or what to write, and we certainly didn't all say that you should go long AAPL at $700 and short BBRY at $7.

    @infektu: Point taken. That said, the situation is a little different for Google, which doesn't make any money off of smartphones (although they may try now with Motorola). All Google wants to do is get people to use their services so it can collect more data and sell more advertising. Doesn't really matter to Google whether you're using an iPhone, Android, PC, etc.


  • Report this Comment On May 16, 2013, at 1:41 PM, k1moops wrote:

    You forgot a key point: Apple & Google take no prisoners.

  • Report this Comment On May 16, 2013, at 2:48 PM, Chippy55 wrote:

    If you want people to buy your razor blades you give them a free razor, so what Blackberry did is smart and something Steve Jobs would never have thought of doing or why didn't he do it? Before Mr. Heins even spoke one word at the Live Event on Tuesday the shares, which had been inching up in the first 1/2 hour of trading, suddenly turned won, ON NO NEWS. That says to me the short sellers were all piling on again and in some cases that means they are tripling down, and that means the short squeeze is only going to be that much bigger.

    Folks, don't facilitate the shorts by leaving your shares at the broker where they can be loaned out to be shorted, have them sent to you in certificate form. This will cause the shorts to start scrambling now. I'm here for the long term and am still adding, anything under $15 is a bonus.

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