Shares of BlackBerry Ltd. rallied after hours as the company announced its board would begin a review of the segments of its business. BlackBerry was once a smartphone giant but has since pivoted to focus on cybersecurity technology, automobile software systems, and mobile communication infrastructure. With this move, the board hopes to weigh strategic alternatives, any of which could potentially result in the separation of one or more of Blackberry’s businesses. The company made it clear that the strategic review is intended to “evaluate opportunities to further enhance shareholder value.”
Over the past few years, BlackBerry has slowly but surely transformed from a smartphone maker to a security software provider for automobiles and mobile devices. BlackBerry has been increasing its presence in cybersecurity, with the firm’s software used in over 150 million vehicles worldwide. In addition to software, BlackBerry is also working on advanced driver assistance systems (ADAS) with its QNX Hypervisor software. It is considered a leading supplier of secure connectivity solutions for the auto industry, including safety, vehicle automation, and network security.
Cybersecurity is increasingly pertinent, as companies and governments worldwide are under heightened risk of cyber threats from hacker groups and nation-states. Moreover, the growing use of mobile devices in business and personal life, the prevalence of the Internet of Things (IoT), and emerging fields such as autonomous vehicles make securing connected systems more critical than ever.
BlackBerry already has partnerships with leading companies in the auto and tech industries, including Amazon’s AWS IoT, Delphi Technologies, and LG Electronics. Earlier this month, BlackBerry announced it is expanding its partnership with vehicle communication system leader Baidu for ADAS and connected cars. BlackBerry will provide its QNX Neutrino Real-time Operating System (RTOS) for Baidu’s autonomous driving open platform, Apollo. The Apollo platform uses real-time navigation, mapping data, vehicle-to-everything communication, and backup systems to support the mass production of several car manufacturers’ autonomous vehicles.
The strategic review of its businesses could aim to maximize the value of its core segment, its cybersecurity software. The company plans to increase earnings and reinforce its competitive position through its transformative growth strategy, which includes building on existing partnerships in the automotive sector, broadening its IoT security offerings, and targeting developing regions for its mobile security systems.
BlackBerry’s steady transition from a leading smartphone maker to an industry-major cybersecurity provider indicates that they can adapt to changing market dynamics. As a result, the strategic review of the business segments may also prove an opportunity to evaluate whether BlackBerry can create new connections in the cybersecurity industry or further expand its growth potential in the automotive sector.
The board has not set a timeline for completing the review, and no progress will be disclosed until the review reaches a specific deal or ends. BlackBerry stated that there are no assurances regarding the outcome of the strategic review, and the board may decide to leave its current business structure unchanged.
Regardless of the outcome of the review, Blackberry’s ongoing evolution demonstrates its ability to adjust its business model and remain a significant player in today’s market. As the company continues exploring various avenues for growth and value enhancement, it may find new opportunities in emerging technologies and industries where cybersecurity will play a crucial role in the years to come.
