BlackBerry announced last week that it has signed a technology and brand licensing deal with Punkt Tronics AG. The deal will see Swiss consumer electronics maker Punkt launch consumer devices secured with BlackBerry’s cybersecurity technologies. This is the second major licensing deal after it signed a similar agreement with China’s NTD last year and is part of CEO John Chen’s mission to turn BlackBerry’s core assets into profitable businesses.
BlackBerry and Microsoft have been the biggest casualty of the post-smartphone era. Once the leaders in connected device market, both the companies failed to adopt to modern methods of communication and let Apple and Android offer consumers a more streamlined experience. However, both of them want to stay relevant in the smartphone business.
Since taking over as CEO of Microsoft in 2014, Satya Nadella has written off the $7 billion acquisition of Nokia and stopped the infighting over patent licensing. In fact, Nadella has negotiated an even smarter deal where smartphone makers will bundle their devices with Microsoft apps and in return won’t be required to pay for patent license. At one point in time, the patent licensing business contributed over a billion dollar every quarter.
John Chen, who took over from Thorsten Heins, is no different from Nadella in his approach towards the mobile first world. Since taking over as CEO, Chen has gotten rid of hardware manufacturing in order to concentrate all its efforts on software development. The Canadian company has outsourced the hardware manufacturing to BB Merah Putih, TCL Communications and Optimus under brand licensing agreement. Chen has also identified that the secure aspect of its mobile operating system itself has more value than the core OS in the ever changing technology landscape.
Chen decided to drop work on development of BlackBerry OS and adopted Google’s Android OS for its mobile devices. However, what made BlackBerry’s Android different from the one available from Android Open Source Project is the security feature. The Canadian company bundles its devices with a security suite called DTEK, which relies on superior threat detection and modular algorithm to offer on device protection.
“BlackBerry made great strides in executing our business strategy in 2017. We are no longer in turnaround mode and are pointed in the right direction. Seven consecutive quarters of positive operating income and an enterprise cyber-security software and services business that’s growing at double digit rates delivering 85 percent of total company revenue in the last quarter. And we believe we are still in the early phases of building our enterprise business with a lot of room to expand in the future,” CEO John Chen recently said about the business.
BlackBerry calls the licensing deal with Optiemus in India, BB Merah Putih in Indonesia and TCL Communications for the rest of world as stage 1 of its strategy. The partnership with (NTD) Yangzhou New Telecom Science and Technology Company Ltd in China and Punkt is being dubbed as stage 2 of the license strategy. Optiemus launched its first device in the form of BlackBerry KeyOne last year and Hardip Singh, Executive Director, Optiemus Infracom shared future plans with BGR India.
“Optiemus signed an exclusive licensing agreement with BlackBerry in February last year to design, manufacture, market and sell BlackBerry-branded devices in India, Sri Lanka, Bangladesh and Nepal. The BlackBerry KEYone LIMITED EDITION BLACK was the first device rolled out by Optiemus in August last year. We recently revealed our plan to launch touchscreen devices with BlackBerry security in next few months. India has always been a good market for the iconic BlackBerry brand. Even now there are more than a million active BlackBerry users in India. Through our partnership with BlackBerry, Optiemus will not only target the top-end of the market but also the mid-end segment.”
Now, BlackBerry is reverse engineering the process by offering the security suite directly to device manufacturers and major consumer electronics brand to protect their devices. If 2017 is any kind of an indicator then it is clear as more devices go online and connect to the internet, the threat landscape is only likely to become larger and securing each and every device at the time of their development will serve as an effective way of mitigating such threats. That is also the promise of BlackBerry Secure. We had a chance to chat with Alex Thurber, Senior Vice-President and General Manager of the Mobility Solutions Division at BlackBerry about BlackBerry Secure and other company-wide efforts. Below is an edited excerpt of the interview.
What is BlackBerry Secure?
“BlackBerry Secure uses BlackBerry’s secure manufacturing system to ensure that the hardware is protected. We inject encrypted keys during the manufacturing and ‘harden’ the bootloader to ensure nothing gets into during the boot process. Then we secure the core or the kernel (usually a Linux kernel) and make a number of changes to our RTM to ensure the device is secure,” explains Thurber.
With BlackBerry Secure, BlackBerry will be inside the system helping secure the operating system and overall device. Consumer electronics brands signing up for the program will also get access to BlackBerry’s secure manufacturing process. Punkt is a company that specializes in differentiated consumer electronics devices like a dumb feature phone or simple alarm clock. With the agreement, all the future Punkt devices will be secured with BlackBerry’s cybersecurity suite.
Alex adds, “This way the products will still be branded as Punkt so end user will still go buy a Punkt device just like today. But they will see enhancements that it is BlackBerry Secure. That may be on a splash screen, it might be a label on the back of the device or on the box, depending on what the devices actually are.”
Does BlackBerry Secure apply to just smartphones or any type of consumer device?
We are not licensing the BlackBerry brand in this case and just the security protocol which can be referred to as Secure by BlackBerry or BlackBerry Secure brand. We are licencing all of our security technology depending on the devices that our partners will be producing under this agreement.
Neither BlackBerry nor Punkt is ready to announce devices being planned under this agreement just yet but those devices will be fully BlackBerry Secure.
Will BlackBerry Secure expand to other companies?
Yes we are working with a number of companies in the communication business and outside of that. As long as there is some model of connectivity, it needs to be secured and it is something that we are very focused on.
Where does BlackBerry see itself and its partner devices in 4-8 quarters?
Connecting people and things is the new norm. Behind the scenes, it is also transforming how enterprises develop, market, distribute and sell products. This is what BlackBerry calls, ‘The Enterprise of Things’ or EoT. Our focus is on providing enterprises such as the world’s largest banks, hospitals, law firms and governments with the highest standard of security, ultimately enabling them to be BlackBerry Secure.
Our software licensing business is a key part of this strategy – and we have taken phased approach in our strategy in the lead up to today’s news with Punkt. As the market continues to mature, you are going to see this evolve very quickly. Looking ahead, we are focused on building upon our partnership with companies like Punkt and NTD, licensing BlackBerry Secure technology for all kind of IoT connected devices such as health monitors and smart home devices.
Should consumers be excited about BlackBerry Secure as a platform
When speaking to consumers, we often talk more about privacy than security. We believe individuals, not hackers, should be in control of who has access to their personal information. When experts talk about security, they use the words “risk management” and a “layered approach.” What exactly does this mean and why should consumers care about what BlackBerry Secure does?
Today, people’s homes and personal connected devices are just as – if not more vulnerable – to cyber-attacks. Millions of ‘devices’ such as fridges, TVs and even your car have not been designed with security in mind, but are connected. Just last year, BlackBerry demoed how you can hack a wifi network through a connected kettle and a Jeep was hacked through a cellular network and run off the road.
Although it may not be front of mind right now, it will be – and it should be. Yes, we definitively believe consumers should be excited because nobody wants their home hacked and personal data leaked on the internet.
What is the forward looking technology that BlackBerry is excited about?
It is clear that BlackBerry is no longer just about the smartphone, but the smart in the phone, and in cars and containers, medical devices and wearables, consumer appliances and industrial machinery, and ultimately the entire enterprise. Already with BlackBerry QNX, we are used in 60 million cars worldwide.
John Chen said recently, “It has been a busy few months and the culmination of years of research and development and relationship-building. And we are just getting started. With two growth engines coming up to speed, our enterprise cybersecurity and automotive capabilities, this will converge on an even larger opportunity: A hyperconnected world of people, enterprises, vehicles, assets, infrastructure and more where the secure flow of information across a vast array of endpoints is both mission- and safety-critical.”
In this fast approaching future, BlackBerry is uniquely positioned. Our safety-certified embedded systems and technology; IP portfolio; and military-grade cybersecurity tools and services for secure communication, collaboration and endpoint management are all powerful and necessary enablers of the IoT reaching its full potential. With each new Enterprise of Things (EoT) deployment and every bit of progress in connected and autonomous vehicles, BlackBerry is feeling the acceleration. The road ahead beckons and we’re eager to see where it leads.