Here's How BlackBerry Ltd Bounces Back

Image by Flickr user Ian Shaw

When BlackBerry (NASDAQ: BBRY  ) switched its name last year from Research in Motion and subsequently dodged a buyout, investors were left wondering about the future of the company that had fallen so far in the past decade. Now potential answers are emerging. Despite a stock price around $7, which is about 48% lower this quarter compared to last year, the new BlackBerry remains focused on its paradigm shift. Now, reports are starting to back up that optimism.

True, the company has reported fiscal fourth-quarter losses of $423 million in March. This was not as bad as expected, however,  and CEO John Chen has forecasted a financial turnaround for fiscal 2016. What will fuel this hopeful return? If recent moves are any indication, BlackBerry is set to enter new high-growth sectors far beyond traditional handsets.

New mobile health devices with NantHealth
On April 15, BlackBerry announced a partnership with health tech company NantHealth, signaling the company's foray into the busy world of health software. The venture aims to create a smartphone designed from the ground up for the health care industry, containing features that let users view 3D images and CT scans more easily. It will be due out in either late 2014 or early 2015.

BlackBerry gained 1.4% to $7.24  on its acquisition of a minority stake in the health start-up. Currently, NantHealth offers services in use in 250 different hospitals. If BlackBerry continues on this enterprise path, it will be interesting to see if the venture's market share increases on the strength of BlackBerry's brand, which is generally more accepted (for now) in commercial and government agencies than in the private sector.

Dashboard triumph with Ford deal
BlackBerry also received some good news back in February, this time from the auto industry. Ford, after spending years working with Microsoft's (NASDAQ: MSFT  ) Sync system, announced that it was dropping Sync and moving to BlackBerry's QNX operating system for its cars. Sync had been designed to equip dashboards with voice commands and integration with Windows phones, but after multiple updates it seems that Ford was still concerned with customer opinion and problems with system crashes. 

The switch to BlackBerry's QNX system represented both a win for the struggling company and an entry into the auto tech market. Microsoft has since responded with a new "Windows in the Car" product demo, but Ford appears set on its BlackBerry decision, at least for its upcoming models. The dashboard tech world has grown increasingly competitive with entrants like Apple and Google also competing over automaker contracts, but if BlackBerry can maintain the Ford partnership then it may be able to hold a position in this market in the years to come.

BBM, now with stickers
BBM, BlackBerry's instant messaging service, has proven a bright spot for the company in recent years. The mobile service has 80 million users and around 500,000 chat rooms,  and recently moved to Android and Apple phones in 2013. BlackBerry has also indicated plans to bring the messaging service to desktop computers, allowing business users to start a conversation on their desktop and move the chat to a phone without fuss.

The primary question with BBM is how BlackBerry can successfully monetize it. The answer appears to be a push further into the social world. BBM already had some social features, such as the creation of forum-like Channels, but now BlackBerry is adding emoticon-like "stickers" or original icons that can be plugged directly into conversations. The best sticker packs cost about $2, and early signs point to successful revenue generation in global markets like South Africa and Indonesia.

The migration to specialized professional hardware for the tech world, software services in emerging industries like dashboard tech, and social features could make a big difference for BlackBerry in the years to come. Yes, the company still struggles with losses, but the ingredients of a turnaround are in the mix.

Editor's Note: This article has been amended to correct BlackBerry's CEO's name. 

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Read/Post Comments (13) | Recommend This Article (1)

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 April 22, 2014, at 2:30 PM, FrozenCanuck wrote:

    Dude... the CEO's name is not Jack. Come on.

  • Report this Comment On April 22, 2014, at 2:35 PM, cbglobal wrote:

    Ford going with QNX does not give Blackberry an "entry" into the auto tech market. Ford is actually late to the QNX bandwagon.

    Already there is Acura; Audi; BMW; Chrysler; GM including the OnStar system; Hyundai; Land Rover; Porsche; Renault; and even Caterpillar.

  • Report this Comment On April 22, 2014, at 2:38 PM, cbglobal wrote:

    Ford going with QNX does not give Blackberry an entry into the auto tech market. Ford is actually late to the QNX bandwagon.

    Already there is Acura; Audi; BMW; Chrysler; GM including the OnStar system; Hyundai; Land Rover; Porsche; Renault; and even Caterpillar.

  • Report this Comment On April 22, 2014, at 2:42 PM, cbglobal wrote:

    You will realize the relationship of QNX with OnStar when you remember that you can talk to the OnStar representative for help. There is a basically a bare bones Blackberry phone in the OnStar hardware.

  • Report this Comment On April 22, 2014, at 2:49 PM, newton01 wrote:

    @FrozenCanuck, I had to laugh at that mistake as well.

  • Report this Comment On April 22, 2014, at 2:58 PM, abigchocoholic wrote:

    Scary. None of the stuff you mentioned has any possibility of generating any net profit for the foreseeable future.

    You just made the case for valuing this at about $1.

  • Report this Comment On April 22, 2014, at 3:17 PM, TMFJCar wrote:

    Yikes,

    Hey guys, we got the CEO's name fixed. Sorry for the error.

  • Report this Comment On April 22, 2014, at 3:25 PM, devvvv wrote:

    QNX built the OS for the playbook, noticed how it flopped?? QNX built BB10 notice how it flopped?

  • Report this Comment On April 22, 2014, at 4:51 PM, omniview2k14 wrote:

    @Devvvvv. the Blackberry OS did not flop, the hardware did. You need to read more and say less. IOS flopped badly especially IOS 7, 7.01,7.02, 7.03....keep on patching... , however, the hardware is outstanding.

  • Report this Comment On April 22, 2014, at 5:01 PM, devvvv wrote:

    Omni I extensively studied Blackberrys OS and found dozens of mistakes, well maybe I should not say mistakes but missing very important features and functions

  • Report this Comment On April 22, 2014, at 5:08 PM, HolyMillionaire wrote:

    Although QNX is the core for BB10 and by industry standards it did flop - the operating system itself is very stable, reliable and flexible. I for one don't want my cell phone working like my desktop computer, much less my car's infotainment system! I think Ford moving to QNX is a great thing for both companies. Ford has "reliability issues" cirulating the consumer reports arena but wouldnt you know mostly all complaints against Ford have been centered around the Sync system. I have a BB Z10 on ATT and it is by far the best BB phone I have ever owned. Not that having a zillion apps ever mattered to me but the latest update to my Z10 gave me the ability to run Android apps as well. This is another example to the flexibility of the QNX OS. Now I have the security, stability and reliability of a BB with the added bonus of having the option to use Android apps and now easy integration into my Ford's infotainment system, superb...

  • Report this Comment On April 22, 2014, at 7:13 PM, tlacoma wrote:

    Sorry fellow Fools, the Blackberry CEO is of course John Chen!

  • Report this Comment On April 23, 2014, at 12:28 PM, fixmsft wrote:

    I really did came up with a plan to get everybody to stop using BBM and go with a exciting, most innovative messaging service like Skout which is fully designed for people who want to have friends experience, be chatty and socialize in new 21st century way BBM would never provide. BlackBerry is going away over next couple of years and I think real estate agents should consider a big mighty plan to stop going with BB and move to iPhones. I consider everybody including poor families should own a iPhone and pay $200 dollars for iPhones and they will be happy. Blackberry is not good for BBM and it will never stay. I think mobile operators would get customers and businesses to make a switch to a powerful iPhone 5S asap because it is soo much fun to use. Please get everybody on powerful and most coolest iPhones now and stop using BBM because nobody will ever use BB anymore. Move to Skout for faster and more responsive socializing and chatting experience most lighting enabled friends or bestfriends do every day. The number of lightning enabled humans are growing and bb never came up with that idea because they are late and will never succeed when a lighting connected bb comes out. They are finished and most businesses including governments and health care providers should get out of using BB healthcare services at all.

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