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BlackBerry Ltd. Continues to Innovate After Handsets

BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY) was once the dominating force in the smartphone market. The small-screened chicklet-sized keyboard handsets were iconic and well ahead of their time, leading to the BlackBerry becoming a de facto sign of what it means to be serious about business.

Renowned for security, those handsets made their way into the hands of leaders of business and government, becoming a lucrative, recurring, and secure source of revenue for BlackBerry.

While most companies have long-dropped exclusively requiring BlackBerry handsets, the government has always been perceived as an iron fortress for BlackBerry, and impenetrable by both iOS and Android handsets.

That last bastion of BlackBerry’s former era is now at an end.

Federal government drops BlackBerry

Ottawa announced recently that 43 federal departments that are currently locked in to using BlackBerry devices will soon have other hardware options, including devices running iOS and Android.

Despite having a market share that is more akin to rounding error, BlackBerry devices were still common in government, and still providing a shrinking source of service revenue for the company.

The decision is not surprising, especially seeing that BlackBerry passed the manufacturing and designing of phones over to regional partners last year, and mothballed its own proprietary OS in lieu of the more popular Android OS. The BlackBerry devices that the government uses are already discontinued, which ultimately could become an issue in keeping to software current.

BlackBerry noted that this signaled the end of an era, and this couldn’t be further from the truth. BlackBerry today is so much more now that the company is no longer designing phones. In some ways, the hardware division was distracting the company from what BlackBerry was always about – software, and more specifically, secure software targeting the enterprise segment.

That’s not to say that the government still won’t use BlackBerry. BlackBerry’s in-house EMM solution will continue to be used to manage all devices (including non-BlackBerry ones, and BlackBerry’s secure BBM messaging software will still be used to discuss and share classified information.

There’s more to BlackBerry than devices

One of the perennial misconceptions about BlackBerry is that following the shuddering of the hardware division, the company without a hardware unit was lacking direction. This couldn’t be further from the truth.

BlackBerry’s continued advancement of QNX auto is one area where the company is a market leader. QNX, which is the underlying operating system that powers everything from nuclear power plants to medical machinery, is incredibly secure, stable, and shockingly, already installed in upwards of 60 million vehicle infotainment systems.

As infotainment systems expand with more features and seemingly become more integrated with other systems in vehicles, the need for a centralized OS to manage all the disparate systems emerged, with QNX being a natural fit.

BlackBerry is already working closely with several automotive manufacturers to further integrate QNX into the next generation of vehicles, including autonomous driving.

BlackBerry’s IoT asset tracking product, Radar is another unique product offering. Radar is a small transponder that can be affixed to trucks, containers, rail cars, or any object on the move. The transponder feeds a myriad of information that could be anything from the speed and location of the object to the humidity level and when the cargo doors were last opened.

The potential for this simple, yet lucrative device is virtually untapped in the market, and Radar leverages BlackBerry’s well-developed back-end infrastructure for secure transmissions.

While BlackBerry may not be making smartphones anymore, the company is still actively leading the smart-revolution and has become an intriguing investment option under John Chen.

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Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

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