Should BlackBerry Ltd. Migrate Over to Android Altogether?

Should BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) simply give up its own operating system?

| More on:

BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) shares have surged in recent days as more details emerge about the company’s latest smartphone, the Priv.

As we all know by now, the Priv runs on Android and features a slide-out keyboard. And in a recent interview, CEO John Chen said the phone has “the latest specs.” Now, we at least partially know what he meant; the phone will feature a 64-bit processor, and will also allow users to shoot 4K video.

So, BlackBerry still knows how to create a decent phone, even if the company has to use a new operating system. That brings up an interesting question: Should the company migrate over to Android entirely?

Some resistance at first

The Priv will be the fourth handset launched by BlackBerry since John Chen took over as CEO. The first three—the Passport, Classic and Leap—have quite simply not met expectations. So, if the Priv is even mildly successful, it will easily be BlackBerry’s most popular device in recent memory.

But that wouldn’t mean a migration to Android is imminent. BlackBerry 10 is still more secure than Android, and this security is cherished by the company’s most important customers, including the United States government. And there’s no way BlackBerry will want to antagonize these customers.

The strongest forces will prevail

Over the long term, however, it’s hard to see the company sticking with BlackBerry 10. Smartphone users—both corporate and consumer—have repeatedly shunned these devices, mainly because there aren’t enough apps available. Making matters worse, enterprises are becoming more and more comfortable with letting their employees bring their own devices to work, which doesn’t bode well for BlackBerry 10 (governments are an exception to the rule).

Furthermore, BlackBerry could save a lot of costs by giving up on BlackBerry 10. The company wouldn’t have to develop expensive updates for its own operating system, or develop new ones altogether. Troubleshooting-related expenses would also plummet.

So, over time you should expect to see BlackBerry migrate over to Android. The company could start by simply not releasing any new handsets running BlackBerry 10. Then it could start encouraging its enterprise customers to issue the Priv to employees. Eventually, BlackBerry’s own operating system would wither away.

What this all means for the company

At the end of the day, the real key to BlackBerry’s future is Enterprise Mobility Management (EMM). So, whatever decision the company makes with its handset business will be done with EMM in mind.

Thus, if the Priv is successful, then BlackBerry will ultimately try to use the phone to drive EMM sales. And if the Priv flops, the company may abandon its handset business altogether, preferring instead to focus on EMM. Investors should be paying very close attention, no matter which way the company goes.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Benjamin Sinclair has no position in any stocks mentioned.

More on Tech Stocks