“The restructure is over” — those are the words that started to emerge from the offices of BlackBerry Ltd (TSX: BB)(NASDAQ: BBRY) on Tuesday. So that’s it then, all is back to normal, pay no attention to the past few years, and don’t forget your gift bag on the way out.
Wait, what?
No, this ordeal is far from over for BlackBerry. It’s easy to forget that it has been only eight months since John Chen took over the company, but it’s not easy to forget that in the past five years the company was forced to cut about 10,000 jobs, or 60% of its total workforce. The Playbook bombed, and several years of poor performance have eroded the financials of this once-anointed prince of the tech sector.
Is this memo a smokescreen, or is it actually the first glimmer of a brighter future? Is that a light of hope at the end of the tunnel or the speeding locomotive of reality bearing down on the company?
The memo
The yet-to-be-authenticated internal memo written by John Chen goes on to say that, “We have completed the restructuring notification process, and the work force reduction that began three years ago is now behind us”. The memo also indicates that the company is now in the position to start hiring again.
John Chen laid out the possible areas for growth in the memo, apparently stating that “barring any unexpected downturns in the market, we will be adding headcount in certain areas such as product development, sales and customer service, beginning in modest numbers”.
There are also rumblings inside the company that it “is now in a position to make strategic acquisitions to strengthen areas that are likely to drive future revenue growth.”
The future of the brand
Since taking the reins, John Chen has made the decision to outsource some of the company’s consumer smartphone hardware to China in an effort to refocus its Canadian resources. In doing so, the company is believed to be pursuing the “high security” phone market, such as government, military, and big business customers.
This summer will be a bit of a lull for the company as many of its newest hardware products won’t hit shelves until the end of the year. Other areas of growth could be in the mobile data security sector, as is evident by the company’s purchase of Secusmart, a private German company known for its data and voice encryption capabilities.
Project Ion
Project Ion is the code name given by BlackBerry to a series of projects designed to take advantage of the Internet of Things. This technology creates an infrastructure for devices, sensors, phones, and computers to communicate with each other.
BlackBerry recognizes this as an opportunity to tap into the untold number of devices that need to be connected in a usable manner. This is not the public internet; this is a series of privately controlled networks whose information can be more easily secured, controlled, and licensed by BlackBerry.
One example that has been given is the amount of sensors in everyday cars that could be programmed to sense when a car hits a pothole. This would create a GPS marker, and if enough of these markers are created, it would alert the local city or municipality that something might be going on with that particular patch of road.
This foray into the internet of things by BlackBerry would put it directly against the industry’s current leader, Sierra Wireless, Inc. (TSX: SW)(NASDAQ: SWIR). While BlackBerry is starting to turn around, this competition could turn ugly for both companies very quickly.
