This Is Big for BBRY Stock
BlackBerry Ltd (NASDAQ:BBRY) is undergoing a massive overhaul. Investors must watch out for these interesting developments that will forever change their outlook on BBRY stock.
BlackBerry CEO John Chen has swallowed the bitter pill that hardware is no longer the company’s economic moat. But with his Midas touch, the company is creating a new moat. So far, everything has fit perfectly into BlackBerry’s grand scheme of things.
To give you a better perspective, let’s start from the beginning…
Rewind back to last year when BlackBerry went shopping and bought two smaller software companies—Good Technology and AtHoc.
The common denominator in both of these acquisitions was the aspect of security. Good Technology lent a secure platform for mobility management, while AtHoc provided a software platform for delivering emergency security alerts to all sorts of hardware, including smartphones and computers.
Following these acquisitions, the company made another interesting acquisition last week. BlackBerry bought a cyber security company—Encryption. Pay close attention to what BlackBerry’s Head of Corporate Development James Mackey said about this purchase.
“This is a natural extension of what we do right now,” hinted Mackey. “We think it is highly complementary and a nice addition to our security portfolio,” he added. (Source: “BlackBerry Pushes Into New Territory With Latest Acquisition,” Fortune, February 25, 2016.)
So what exactly is BlackBerry doing right now and why is it building this security portfolio? Let me explain…
The way I see it, BlackBerry is quietly building an ecosystem. And these acquisitions hint at something even bigger than I earlier imagined.
If you’ve been following Profit Confidential, you may recall that I have discussed this before, the topic of how BlackBerry is creating its own niche in the “Internet of Things” (IoT) ecosystem, a growing phenomenon where devices of everyday use will get interconnected and communicate with each other wirelessly. (Read: “This Technology Could Send BlackBerry Ltd (BBRY) Stock Soaring.”)
BlackBerry’s “QNX” operating system (OS) no longer powers your smartphone, but it does power your car and might soon be running on every other hardware you can think of. This could include everything from traffic control systems to medical devices and factory equipment, as BlackBerry hints. (Source: “QNX Unveils New Bluetooth Solution for Embedded System Developers,” Yahoo! Finance, February 23, 2016.)
But as the IoT ecosystem grows, demand for security will also grow. Imagine if all of your daily-use devices are interconnected to each other and ultimately to your smartphone. This includes your car, home security alarm, TV, tablet, baby monitor, and refrigerator—to name just a few devices. This is what IoT is all about.
However, imagine an intruder hacks into one of these devices. It will take him only one device to get complete access to your entire life and your family’s safety. Yes, the thought is too horrifying to hold any longer.
But you see what I’m getting at here?
Security, especially cyber security, will be of paramount importance when IoT truly takes off. This answers what Mackey hinted at when he spoke of BlackBerry’s latest acquisition.
The Bottom Line on BBRY Stock
BlackBerry’s acquisitions indicate that the company not only wants to be an early mover in the IoT industry, but it also plans to provide the most secure IoT platform. If BlackBerry does it right, the company might be able to secure a big market share before competition from bigger technology companies catches up.
Long story short: this wager could turn out to be a promising venture for the company. The biggest winners of this bet will certainly be the loyal investors who have stood ground with BBRY stock.