The decline in market share for BlackBerry Ltd. (TSX:BB)(Nasdaq:BBRY) has been nothing short of stunning. To put this in perspective, the company accounted for about half of worldwide smartphone shipments in 2009. According to the latest data, that share shrank to 0.4% in 2014, down from 1.9% the year before.
People who are betting against BlackBerry—and there are plenty—cite this market-share decline as a big part of their reasoning. That said, BlackBerry is going through a major transformation under new CEO John Chen, one that emphasizes software revenue over smartphone sales.
There were some recent announcements that highlight this transformation that are discussed further below. As can be seen, BlackBerry’s smartphone market share is mattering less and less.
The partnership with Samsung
Samsung Electronics Co. Ltd. has had a lot of success selling smartphones to consumers. However, its success rate has been much lower in the corporate market. For that reason, it partnered with BlackBerry to offer a “highly secure mobility solution,” announced back in November.
On Monday, the two companies announced they would be beefing up this partnership. BlackBerry will be integrating two more of its services into KNOX (Samsung’s enterprise mobile security solution): WorkLife and SecuSUITE. WorkLife allows enterprises to accurately split mobile billing, which is absolutely necessary when employees use their personal phones on the job. SecuSUITE offers highly secure voice and text communications, another must have in the corporate world.
Most importantly, this partnership is not dependent on BlackBerry’s smartphone sales. Instead, the company is piggybacking off of Samsung’s success, all while offering some very valuable services.
Not stopping there
As part of its cross-platform push, BlackBerry made the well-known BlackBerry Messenger available on other devices, such as the iPhone. When this was done, the response was overwhelmingly positive, with 10 million downloads on the first day alone.
Mr. Chen plans to take this a step further by making more BlackBerry apps available on other devices. More specifically, the company will make its Security Suite, Communication Suite, and Productivity Suite on iPhone and Android devices. For the time being, this will all be part of BlackBerry’s enterprise offering, although this could eventually be offered to the consumer market too.
So, what does this all mean?
Mr. Chen has made it clear he wants to double BlackBerry’s software revenue to US$500 million by March 2016, and these announcements should help with that.
Does that mean you should buy BlackBerry shares? Well, not necessarily. After all, the company’s recovery is still in the early stages. That said, if you’re thinking of buying the stock, at least you don’t have to pay such close attention to any dismal market share numbers.