Thought BlackBerry was on its way out? Think again. Although investors might have lost faith, the United States government has brought them back from the brink and given them quite a bit of credibility.
According to cNet, the US Department of Defence plans to distribute “tens of thousands” of a variety of brands of mobile devices to employees throughout the course of 2014. There will be what they are calling “unclassified mobile devices”, 1,800 in all, including models like the iPhone 4S and 5, Samsung 10.1 tablets, and Motorola RAZRs amongst others. Included with those – 80,000 BlackBerry smartphones.
Yes, the Department of Defence securing so many of BlackBerry's product is certainly a great profit booster. However, the news of this deal did so much more for the company, mainly in the form of share prices rising significantly. At the end of 2013, shares of BlackBerry stock were trading for $7. The news broke Tuesday, and when the market closed, shares were up to $9.93. Later on that night, shares soared to $10.57.
This is great news for a struggling company, fighting to stay alive in an Apple and Android run world. Though it was thought their smartphone would revive the brand, it just wasn't meant to be. With products like Apple and Samsung offering a host of useful features and robust app stores, BlackBerry found it difficult to successfully compete.
Customers were dropping like flies – numbers for last quarter were dismal, showing a 50 percent loss in sales and 75 percent of all sales for Blackberry 7 devices. It seemed no one wanted anything to do with the BlackBerry 10 OS.
The Government To The Rescue
It should be expected that the government would request BlackBerry products. The Department of Defense has certain security needs, and they feel that BlackBerry is the right company for the job. Indeed, it's not just in the US – all seven of the G7 governments rely on BlackBerry for their mobile needs.
The company was pleased when their new BlackBerry 10 devices passed the security test for the Department of Defense last May, putting in motion the plan to acquire 470,000 of the company's phones even though they had approved devices by Apple and
Samsung, breaking the BlackBerry-only tradition that had at one time been the rule. And why do governments all over the world sign contracts with BlackBerry? It's simple – it's all about security. If there is anyone that depends on a high level of security, it is the government!
Not All Good News
It isn't all roses for BlackBerry – on the very same day it announced it continues to sell off its real estate in Canada. The plan is to sell over 3 million square feet of all of the commercial real estate it owns in a combination of vacant asset sales and sale-leaseback.
BlackBerry's CEO John Chen released a statement in which he assured people of the company's plan to remain in Canada. He's merely looking to provide another way to make money in order to feed the needs of a growing and ever-changing company. Have you already counted this company out, or do you believe they can turn things around and recover?