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BlackBerry plots cybersecurity surge as other revenues tumble

‘There is still a lot of work to do,’ admits chief executive John Chen.

By Jimmy Nicholls

BlackBerry laid out its plans for an expansive suite of security products on Thursday as its chief executive John Chen sought to pivot the firm away from the competitive mobile market.

Speaking in New York, the CEO indicated that BlackBerry would be cutting the number of devices released every year from four to one or two, but outlined a cybersecurity range taking in the connected devices and traditional information security.

"We’re patiently building the product pipeline and the sales channel," he said in an interview, according to Reuters.

"There is still a lot of work to do, I’d love for everything to move faster, but I caution people to be a bit patient because we can’t rebound in a very short period of time, no company can. We are doing all the right things for the long term and the company is definitely out of financial trouble."

Despite previously indicating that this "turnaround" would yield results within the next six months, Chen said that the timetable might extend to a year, or even longer.

Financial data released earlier this year for Q1 2016 showed that revenue for the firm fell on a year-on-year basis from $966m to $658m.

However BlackBerry increased software and technology licensing revenue to $137m, more than double the $54m for the first quarter of the previous fiscal year, whilst combined hardware and service revenues fell from $898m to $515m.

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Commenting on the pivot, Rob Bamforth, principal analyst at research firm Quocirca, told CBR that the company had been able to build on its previous security credentials, particularly highlighting the BlackBerry Enterprise Server [BES], a middleware program for messaging and collaboration tools.

"Over the years the BES has been a very powerful service solution, so they have extended that and built on that," he said.

Bamforth also pointed at Nokia’s exit from the mobile market as proof that a mobile-facing company could successfully leave the market behind, even if Nokia "hadn’t left it in the best way".

"I think BlackBerry will continue to struggle on the hardware side," he said. "Any form of transition, especially for public companies, is fraught with challenges, and most companies don’t make it through."

Adding to events in New York, BlackBerry also revealed it will buy the secure communications firm AtHoc for an undisclosed sum, in yet more evidence the company is pivoting towards the cybersecurity market.

Central to AtHoc’s product line are tools for crisis communications on BlackBerry rivals iOS and Android, as well as Mac and PC, with the company’s customers including the US Department of Defense and Department of Homeland Security.

Guy Miasnik, chief executive of AtHoc, said: "Becoming part of BlackBerry will give us the ability to scale more quickly to expand our global reach and introduce new applications for the AtHoc platform, while continuing to serve our government and enterprise customers."

"BlackBerry is making strategic investments in security, privacy and the Internet of Things, and acquiring AtHoc will enable us to provide a holistic, end-to-end approach to communications," said Chen.

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