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Blackberry stock surges on 80,000 unit “government bailout”, Android still activating 1.5 million daily

It’s no secret that Waterloo-based Blackberry was on their biggest downward spiral ever in 2013. The company, which has conceded tons of market share to the likes of Apple and Google due to lack of innovation, was almost sold off to financial vultures last year. They also had to let go of thousands of employees, and it wasn’t until private investors decided to come in and save their skin that they could step back and regroup to navigate the tough waters that 2014 would bring.

BlackBerry

It looks like they’ve finally gotten their first bit of good news, though, as it has been revealed that the Pentagon has tapped Blackberry for 80,000 new handsets for use on a “new network.” That commitment, which sounds like it has the potential to add more handsets over time, will continue a longstanding partnership between Blackberry and various arms of the American government.

The new units will look to be hooked up to the Department of Defense’s management system by the end of this month, according to a statement by the Defense Information Systems Agency.

That bit of good news allowed Blackberry to see stocks rise as high as 8% in both the US and Canada since the announcement was made. While that wasn’t a huge spike in the price (it’s still hovering around $9.93 per share as of the time of this writing), it was the best news Blackberry has enjoyed in a while.

Will “Government Bailout” be enough?

That commitment by the Department of Defense is a testament to Blackberry’s continued focus on enterprise, government and security, areas where Android’s biggest OEM Samsung and their archrival Apple have had a tough time breaking into. Samsung has been working to improve their worth in those spaces with the cleverly-named KNOX security suite (the Department of Defense approved KNOX-equipped phones for use in the middle of last year), but it hasn’t been enough to woo the Pentagon to order 80,000 phones for employee use.blackberry texting

But you have to wonder if this is simply just a nice governmental band-aid on a bigger problem. How long can Blackberry survive on the business of the United States government? How many more of these, for lack of a better term, bailouts can they rely on before they have to find a way to sustain long-term growth?

As big and as important of an entity as the Pentagon is, it’s clear that catering to nothing but high enterprise and government is not going to cut it. There are hundreds million more consumers out there looking to buy iPhones and Android phones above all else, and Blackberry isn’t doing nearly enough to cater to those folks.

Blackberry vs Android and iOS: By the Numbers

To put Blackberry’s new 80,000 unit sale into perspective, we thought it’d be fun to take a look at recent daily activation numbers and sales figures for competing platforms (to make it fair, we included only one of Samsung’s biggest smartphones):

Just think about that for a second: Samsung and Apple are activating more phones in one day than the Pentagon will in this rare purchase. For Samsung, that’s not taking into account sales of the highly popular Galaxy Note line. For Apple, we won’t even get started on the 1.4 million units they’re preparing to ship off to China Mobile for the iPhone’s impending launch on the carrier.

Should the Pentagon order any more units, they probably still wouldn’t be able to come close to what their competitors are doing right now. This sale is like a drop in the bucket — nay, a drop in the swimming pool — in comparison.

Finding new ways to do old business

Blackberry obviously has bigger fish to fry than that first-time sale, though. They’ll look to continue making money from BES security services and support that the Pentagon will likely have to subscribe to, but that alone still might not be enough.

That’s probably why Blackberry has found the need to embrace iOS and Android in more ways than one. On the consumer side, the successful launch of Blackberry Messenger on competing platforms (40 million downloads in 60 days between Android and iPhone) says a lot about the state of their business.

bbm_mast

On one hand, it puts their foot into the door for selling services on platforms that are doing immensely better than they are. On the other, it helps keep existing consumers tied to their own brand.

Gone are the days where BBM alone is going to sell a handset — it’s a useless tool if all of that person’s friends defect to iOS and Android. It’s a win-win situation for Blackberry in that regard, and it’s the only choice the company had in staying relevant in this fast-changing mobile ecosystem.

And while Android and iOS haven’t done much to threaten Blackberry’s dominance in enterprise, you can tell Blackberry will not take any chances.

Beyond BBM, Blackberry also confirmed that they were working on security solutions and BES support for competing platforms. This would allow them to continue to sell security and support even if their handset business happened to vanish overnight (and would validate suspicions that Blackberry could eventually sell off their OEM business to become a software and services company).

We obviously don’t want to see another competitor drop in this lopsided race, so let’s hope this instance is more than just a one-time confidence booster and a delay to an unfortunate demise.




  • Demarcus Moore

    Big bowser!!!

  • Demarcus Moore

    First negro

    • nycplayboy78

      HAHAHAHA..You STOOPID :)

    • john M

      you related to leroi moore? RIPIPIP

  • John Smith

    read the DISA press release. this is NOT 80,000 NEW BB devices. these are the old devices. the “CURRENT” program has 80,000 legacy BB devices – that’s what they are referring to!

  • John Smith

    How many times does it have to be repeated that no NEW BlackBerrys are being deployed? Also the MDM solution they are deploying is by Fixmo, not BlackBerry.

    From the original Jan 16th press release from DISA:

    “DOD will begin deploying version 1.0 of the unclassified mobility capability Jan. 31 and will build out capacity to support up to 100,000 users by the end of the fiscal year.

    The program currently supports 1,800 unclassified mobile devices including iPad 3 and 4, iPhone 4S and 5, Samsung 10.1 tablets and Samsung 3S, and Motorola RAZR devices with participation from the combatant commands, services, and agencies throughout DOD. The program also supports 80,000 BlackBerry phones.

    By Jan. 31, DOD Mobility Unclassified Capability users in DISA will begin the phased transition to initial release 1.0 capabilities including the mobile device management system, mobile application store, approved devices list, supported cellular access, DOD PKI support, transition of approved applications and enterprise services for mobility including DoD Enterprise Email, the DOD Global Address List, Tier 2/3 Service Desk Support and Defense Connect Online.”

    this is not a win for BB …. compare front page of Fixmo’s website and the lack of any mention on the BB corporate website …. nothing

    This is not BES ,and there are no new phones mentioned … Fixmo has a contract to bring into a new system up to 100,000 existing phones and the vast majority are BB phones [probably most of those are legacy BBs]. If all goes well this can be extended to bring in another 200,000 phones and other devices.

    There is no mention of BB10 or BES in any info about this and no mention of any new phone sales.

  • Jcastag

    Great, more money from my paycheck going to waste. When BB finally goes under this year, they will be spending more of my money to replace these disposable devices.

  • John Smith

    How many times does it have to be repeated that no NEW BlackBerrys are being deployed? Also the MDM solution they are deploying is by Fixmo, not BlackBerry.

    From the original Jan 16th press release from DISA:

    “DOD will begin deploying version 1.0 of the unclassified mobility capability Jan. 31 and will build out capacity to support up to 100,000 users by the end of the fiscal year.

    The program currently supports 1,800 unclassified mobile devices including iPad 3 and 4, iPhone 4S and 5, Samsung 10.1 tablets and Samsung 3S, and Motorola RAZR devices with participation from the combatant commands, services, and agencies throughout DOD. The program also supports 80,000 BlackBerry phones.

    By Jan. 31, DOD Mobility Unclassified Capability users in DISA will begin the phased transition to initial release 1.0 capabilities including the mobile device management system, mobile application store, approved devices list, supported cellular access, DOD PKI support, transition of approved applications and enterprise services for mobility including DoD Enterprise Email, the DOD Global Address List, Tier 2/3 Service Desk Support and Defense Connect Online.”

    this is not a win for BB …. compare front page of Fixmo’s website and the lack of any mention on the BB corporate website …. nothing

    This is not BES ,and there are no new phones mentioned … Fixmo has a contract to bring into a new system up to 100,000 existing phones and the vast majority are BB phones [probably most of those are legacy BBs]. If all goes well this can be extended to bring in another 200,000 phones and other devices.

    There is no mention of BB10 or BES in any info about this and no mention of any new phone sales.

    • marplx

      Since you traverse the internet stating how dumb Canucks are, it would be utterly horrible for BB to get a win wouldn’t it Johnny. Well… better get used to it. Oh, and better research this article a little better. You’ll find DOD is running a mixed solution with BES 10 being one of them.

  • lolwut

    Don’t forget that the margins are considerably better on Blackberry handsets, total number of units sold isn’t everything. For instance Apple only has about 18-20% of the worldwide smartphone market share but their margins, revenue, etc. are huge.

    I hope RIM survives, I do. I think they would do well in the government space because what we REALLY don’t want to happen is for the proprietary parts of Android software/hardware to get infiltrated by the NSA or something to ensure government/FIPS/whatever compliance (e.g.. the US Government strikes a deal with Samsung: sure, we’ll buy a bunch of phones from you if you help us out or something).

    Let Blackberry have this market, just keep us out of it

    • Big_EZ

      You really think they aren’t all over Android already?

      • lolwut

        I’m sure they’re trying, but it’s a little harder to infiltrate AOSP

  • svh105

    Fibulator… or dead.

  • eltiberon

    US Government Bailouts refers to AMERICAN companies that the government is trying to rescue to save AMERICAN jobs. Blackberry is a CANADIAN company, so this cannot be termed a government bailout.

  • Bill Perrotta

    I couldn’t even convince android and ios users to create chatrooms in bbm, just to even try it out. Blackberry give up Fail! Was forced to give up and uninstall the app.

  • Charles

    ONLY BlackBerry has gold-standard 256-bit AES encryption (they own it) at the firmware level which is why Samsung Knox is such a fail. If you’re not encrypted strongly at the firmware level, you’re wide open. The DoD knows this. You “Phandroids” do not. Nor do you realize that NO BlackBerry device has ever been rooted or “jailbroken.” Have fun sending all your data to Google/NSA, dummies! BB10 is five years ahead of you technologically but you’re too busy playing Candy Crush to realize it. And stay off BBM. We like to keep it exclusive, for celebrities and VIPs, not dumbshits who buy cheap phones and fancy themselves tech gurus. Toodles!

    BlackBerry for the win, bitches.

  • charlie2010

    re: Will “Government Bailout” be enough?
    Its not a bailout, they won the competiton.
    knox is the laughing stock of mdm providors and no one else even achienved Blackberrys level of security clearance at DoD. Unlike typical Phandroids they base their decisions on rational criteria, not following trendy teenagers.

    re: it’s a useless tool if all of that person’s friends defect to iOS and Android.

    Is it really a tool for businesses if you are gossiping with your friends? BBM is meant for secure business communications, not discussing Justin Beiber or how drunk you got last night. I guess this paragraph doesnt make sense to a lot of American businesses these days…..good luck with your trillion dollar deficits.

  • John Smith

    Pentagon says ‘absolutely no new orders have been placed’ for BlackBerry phones
    Pentagon says ‘absolutely no new orders have been placed’ for BlackBerry phones
    Stock surges on news of a big win that never was
    By Dan Seifert on January 23, 2014 12:12 pm Email @dcseifert

    The Department of Defense confirmed this in a statement provided to The Verge:

    Absolutely no new orders have been placed for new BB devices. The DISA press release put out Jan. 16 never alluded to any devices being purchased. The 80,000 BBs and 1,800 non-BB devices referenced in the release are legacy systems already in DoD inventories.

  • yewslus

    Hey guys, take down this article or at least correct it. You are going to lose some reputation points as a valid news source if you don’t start checking facts more diligently!