CASES
CASE 36
BLACKBERRY IN 2019 *
Ten years ago, BlackBerry’s annual report featured a picture
of its phone followed by the statement, “Ask Someone Why
They Love BlackBerry.” The next page answered, “People love
BlackBerry smartphones because they make life easier.” Once
a market leader in the smartphone industry, BlackBerry’s
all-time high share price of $144.56 in 2008 came crashing
down to less than $7 by 2016. Over the last decade, BlackBerry
has lost significant market share in the smartphone indus-
try. Speculations began to rise among investors whether
BlackBerry would ever recover. After experiencing severe
losses in both hardware revenues and mobile subscribers,
the company hired John Chen in 2013, a turnaround
specialist, as its CEO to get the formerly dominant smart-
phone producer back to profitability. Soon after joining the
company, Chen formulated a plan that emphasized a focus
on corporate and government enterprises. This significantly
reduced the company’s operating costs. With Chen at the
helm, BlackBerry appeared to be stabilizing, but would this
strategy be sustainable?
“Everybody remembered BlackBerry as the handset
company. But what is the essence of that handset? Secu-
rity,” said John Chen, Executive Chairman and CEO. “This
is why President Obama uses it, you know. This is why a lot
of politicians, bankers, all [use] it—because of security.”1
The realization that security has always been a company
strength inspired a new direction. BlackBerry acquisitions
from 2014 to 2016, Secusmart, WatchDox (now BlackBerry
Workspaces), AtHoc, and Encription, highlight this shift of
focus.2
In February 2019, BlackBerry became a billion-dollar
cybersecurity company after acquiring Cylance, an Artifi-
cial Intelligence (AI) and cybersecurity company. “Today
BlackBerry took a giant step forward towards our goal of
being the world’s largest and most trusted AI-cybersecurity
company,” said Chen. “Securing endpoints and the data
that flows between them is absolutely critical in today’s
hyper-connected world. By adding Cylance’s technology to
our arsenal of cybersecurity solutions we will help enter-
prises intelligently connect, protect and build secure end-
points that users can trust.”3 Already considered a leader
in the Global Automotive Infotainment OS market share
by Strategy Analytics, BlackBerry Cylance’s leadership was
also recognized in five categories of the 2019 Cybersecurity
* This case was prepared by Professor Alan B. Eisner and graduate student Saad
Nazir of Pace University, and Professor Helaine J. Korn of Baruch College, City
University of New York. This case was solely based on library research and was
developed for class discussion rather than to illustrate either effective or ineffective
handling of an administrative situation. Copyright © 2019 Alan B. Eisner.
Strategic Management: Text and
Cases
Excellence Awards: Best Cybersecurity Company, Most
Innovative Cybersecurity Company, Endpoint Detection
and Response, Endpoint Security, and Best Cybersecurity
Podcast.4
In the past three years, BlackBerry formed a number of
corporate and government partnerships. The government
of Canada will invest up to CAD $40 Million to support the
development of BlackBerry QNX software for autonomous
cars.5 Along with its QNX software, the company’s core
end-to-end Internet of Things platform includes BlackBerry
Dynamics, BlackBerry AtHoc, Secusmart, BlackBerry
Workspaces, and the BlackBerry Unified Endpoint Man-
agement (UEM). The BlackBerry UEM offers a “single
pane of glass,” or unified console view, for managing and
securing devices, applications, identity, content, and Inter-
net of Things endpoints across all leading operating systems.
BlackBerry UEM was ranked as a leader in the Forrester
enterprise mobility management report,6 alongside IBM,
Microsoft, and VMware.7
But what about the BlackBerry devices? After realizing
that they had fallen behind in the touchscreen game and
reentering the smartphone industry seemed like a long
shot, BlackBerry decided to stop making its own phones in
2016. As of February 2019, handheld devices resulted in
only 1.4 percent of BlackBerry’s revenue, while its enter-
prise software and services dominated with 40.1 percent
(see Exhibit 1). Although we can confidently say BlackBerry,
that just a couple of years ago was barely surviving, has
made an impressive move from smartphones to software
and security, investors are still a little doubtful about its
­future. “We don’t own BlackBerry [stock] and we’re not
looking to add it,” says Poole, CEO and Managing Director
of GlobeInvest Capital. “I think that the CEO has made
good moves to transition from hardware into software, but I
think going forward there’s still not a lot of visibility about
how they’re going to grow their top line.”8
Research in Motion
Mihal “Mike” Lazaridis and his childhood friend Doug
­Fregin founded Research in Motion (RIM) in 1984. Lazaridis
was born in Istanbul in 1960 and came from a Greek working-
class family. His father’s aspirations to become a tool-
and-die maker led the family to relocate to Ontario, Canada.
Lazaridis displayed remarkable intelligence at an early age
and excelled in both reading and science. Lazaridis was fre-
quently exposed to electrical engineering, sharpening his
intuitive understanding of the basic science behind every
electrical innovation. After graduating from high school,
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 EXHIBIT 1  RIM (BlackBerry) Revenue by Segments, 2019
February 28, 2019
Revenue by Product and Service
Enterprise software and services (1*2) $367
BTS 204
Licensing, IP and other 286
Handheld Id devices 13
SAF 46
$916
Source: Annual Report. BlackBerry Limited, February 28, 2019.
Lazaridis attended the University of Waterloo, however, he
dropped out before graduation and decided to try his luck
in business at the age of 23. The Canadian government en-
abled the formation of RIM by granting Lazaridis and
­Fregin a $15,000 loan. The duo set up RIM headquarters in
Waterloo, Canada, as an electronics and computer science
consulting company. According to Lazaridis, the name Re-
search in Motion meant, “we never stop, we never end,”
signaling innovation that would drive RIM forward.
During the company’s early years, Lazaridis accepted all
sorts of contracts, most of which entailed writing code or
making small insignificant technological gadgets. None of
the early projects proved to be a commercial success, but
they generated enough revenue to keep the company viable
for more than a decade.
The company’s game changer was introduction of e-mail
and data devices. Lazaridis was introduced to e-mail while
in college, at a time when only professors and scientists
were using the service. Lazaridis was convinced that data
would become extremely important in the near future, but it
was hard to find the funding for a project involving e-mail.
In the early 1990s, major mobile carriers were focused on
devices with voice capabilities and in selling as much as
possible until the market became saturated. Reading e-mails
on a handheld device was unheard of. Lack of demand for
devices with e-mail support did not weaken Lazaridis’s de-
termination; he developed initial prototypes by writing gate-
way codes hooked up to an HP Palmtop, the company’s
first device with “e-mail on a belt.” Although the device was
not commercially applicable, it became extremely popular
with RIM employees. Lazaridis recalls that “employees
started taking these things home, and they wouldn’t return
them.”9 What he then understood was that the idea of
“e-mail on a belt” had the potential to generate high demand,
but the challenge lay in making such a product practical
enough for consumers to use on a daily basis.
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For the Years Ended
(in millions)
February 28, 2018 Change
40.1% $423 43.7% $(56) (13.2)%
22.3% 163 16.9% 41 25.2%
31.2% 196 20.3% 90 45.9%
1.4% 64 6.6% (51) (79.7)%
5.0% 121 12.5% (75) (62.0)%
100.0% $967 100.0% $(51) (5.3)%
RIM had great technological potential; it needed strong
business leadership. Enter Harvard graduate Jim Balsillie.
In the 1990s, Balsillie was an employee of a small technol-
ogy company called Sutherland and Schultz, which would
become one of RIM’s clients. Lazaridis and Balsillie first
crossed paths when Sutherland and Schultz tried to acquire
RIM. Lazaridis passed on the offer, but he got a chance to
see Balsillie in action and was impressed. Lazaridis wanted
someone to help out with the business aspect of his com-
pany. When a company from the Netherlands bought
Sutherland and Schultz in 1992, Balsillie was left without a
job. Lazaridis quickly picked up the phone and invited
Balsillie to join his company. Due to RIM’s small size and
limited resources, Balsillie would have to accept a severe
salary reduction and to spend $250,000 to acquire 33 percent
of RIM. Balsillie believed in Lazaridis’s abilities and the po-
tential for the company, so he agreed to the terms. The two
shared duties as co-CEOs and formed a powerful leadership
team in which Lazaridis focused on product development,
and Balsillie took responsibility for management of the
company. With limited success up until 1992, RIM made a
conscious decision to leave its comfort zone and pursue the
brass ring: wireless data. Balsillie truly believed that the
future could be great for RIM, and according to former
Senior VP Patrick Spence, “Balsillie was really strategic in
terms of how he was thinking and really ambitious in terms
of what he wanted to do.”10 Introduced in 1996, the Inter-
active Pager 900 contained peer-to-peer messaging and also
an e-mail gateway. Unfortunately, the device had several de-
ficiencies and operating errors. It was also too big and
bulky to gain commercial acceptance. Thinking of its size,
Lazaridis nicknamed it “the Bullfrog.”
After “the Bullfrog” came “the Leapfrog.” The revolu-
tionary component of “the Leapfrog” was its ability to send
e-mails at any time from any place. A forerunner to the
hugely popular signature product we know today as
Cases
 BlackBerry, the Leapfrog was a success. BellSouth, which
had spent over $300 million in building its mobile “Mobi-
tex” network, ordered $60 million dollars’ worth of Leap-
frogs in 1997. In order to get the necessary funds to
continue its product development, RIM went public at the
Toronto Stock Exchange in 1997, and the IPO raised more
than $115 million.11
The BlackBerry Smartphone and
Its Success
Lazaridis was responsible for developing RIM’s next ver-
sion of a wireless data device that would have better parts,
longer battery power, and a bigger screen. RIM hired Lexi-
con, the company credited for naming Apple’s PowerBook
and Intel’s Premium brands, to come up with a name for
the device. The buttons on the new device looked like tiny
seeds. Lexicon played around with different fruit names
such as strawberry and melon, before it eventually settled
on BlackBerry. RIM now had a great product with a catchy
name, and it became Balsillie’s responsibility to spread the
word on the new offering.
The BlackBerry 850 hit the market in 1999, with wire-
less data, e-mail, and a tiny QWERTY keyboard. Initially,
the Leapfrog and the early BlackBerry device were mostly
used by law enforcement, firefighters, and ambulance work-
ers. One of the things that this niche group greatly valued
was the product’s extreme reliability and security features.
Balsillie thought this would resonate well with corporations
on Wall Street. He knew that corporate IT departments of-
ten made decisions regarding companywide hardware and
purchased the same devices for all their employees. RIM
next resorted to a guerilla marketing strategy, in which hun-
dreds of devices were given away to ground-level employees
on Wall Street. The strategy became an instant success;
Wall Street employees got hooked on the device and subse-
quently pressured IT departments to make BlackBerry the
official device for their companies. Big corporations like
Credit Suisse and Merrill Lynch gave in to this pressure and
ordered BlackBerrys by the thousands. The success led
RIM to go public on the NASDAQ in 1999. RIM raised an
additional $250 million to invest in the development of its
technology.12 Revenues exploded from $47.34 million in
1999 to $84.96 million in 2000, with BlackBerry account-
ing for 41 percent of the revenues.13 RIM’s management
team then targeted the Capitol, where security and reliabil-
ity are perhaps even more crucial than in the corporate
world. Soon, a large number of politicians and congressio-
nal staffers were ordering BlackBerrys.
RIM’s reputation was significantly bolstered by the tragic
events that transpired on September 11, 2001. Instead of re-
lying on cellular telephone systems, BlackBerry functioned
on data systems that held up extraordinarily well. Data
systems could be used exclusively to communicate data in
the form of text messages or e-mails by using dedicated data
networks that were abundant in lower Manhattan. Almost
all cellular networks shut down during the terrorist attacks,
Strategic Management: Text and
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which disabled both incoming and outgoing telephone calls.
However, the BlackBerry and its network remained opera-
tional, enabling victims to call loved ones and keeping vital
communication lines between law enforcement and rescue
workers open. One of the victims of 9/11, Ms. Federman,
recalled, “I had my cellphone in one hand, and it was use-
less, and my BlackBerry in the other, and it was my lifeline
that day.”14 In the eyes of the government there was no
doubt that BlackBerry’s features were important for public
servants. Almost immediately after the events on 9/11, the
American government ordered 3,000 BlackBerrys for repre-
sentatives, staffers, and senators.
Growth was rapid at RIM in this period, and it was en-
hanced by something that the company did not anticipate.
All of a sudden, actors, athletes, and other high-profile indi-
viduals were spotted using BlackBerrys. Among other orga-
nizations, the BlackBerry became standard issue for 31 out
of 32 teams in the NFL. This created a demand among the
general public, who wanted to use the same device they saw
their favorite celebrities using. This resulted in rapidly ex-
panding sales and market share; RIM had more than
2 million users in 2004 and sold devices in 40 countries
through 80 carriers. The massive popularity in the 2000s
saw RIM emerge as a dominant producer of smartphones,
and at its peak in 2009 it had acquired 20.1 percent market
share and sold nearly 15 million devices per quarter.15
According to former account and carrier manager
Chris Key, the BlackBerry became so popular with major
companies that CTOs often referred to it as digital her-
oin, and many started calling it “CrackBerry.” With com-
petition from Google, Samsung, and Apple mounting in
the mid-2000s, however, RIM decided to focus on its
core competencies in security and reliability. By 2018,
Blackberry’s smartphone market share had gone below
0.1 percent, with Android holding an 88 percent market
share and iPhone with an 11.9 percent market share. The
era of the BlackBerry smartphones had come to an end
(see Exhibit 2).
Industry Landscape
Internet of Things
The Internet of Things (IoT) is the interconnection via the
Internet of computing devices embedded in everyday ob-
jects, enabling them to send and receive data. IoT has the
potential to be the next great computing era overlapping
and extending the mobile era and, of course, the PC era,
which still clings to relevancy. BlackBerry’s software aims to
provide the embedded intelligence to secure the Enterprise
of Things so that the Internet of Things can thrive.16 451
Research, a preeminent information technology research
and advisory company, breaks IoT down into four subcate-
gories: consumer, enterprise, government, and vertical-
specific uses. The enterprise segment of the IoT concerns
the integration of IoT with the full support of enterprise IT
tools, platforms, processes, and organizational alignment.
Some vendors have taken to branding this important
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 EXHIBIT 2  Global Smartphone Market Shares, 2014–2018 Symantec. BlackBerry’s enterprise software portfolio in-
Q4 ’09 cludes leading unified endpoint management, secure busi-
ness productivity, application containerization, secure
Q2 ’10 collaboration, and digital rights management capabilities.
Unified Endpoint Management (UEM) occupies a
Q4 ’10 larger part of BlackBerry’s portfolio. UEM revolves around
securing and controlling computers, laptops, smartphones,
Q2 ’11 and tablets in a connected manner from a single console.
Quite popular in the industry today, many companies are
Q4 ’11 opting for UEM. “We feel that UEM will be the best prac-
Q2 ’12 Samsung tice for organizations with diverse endpoints in their envi-
ronment,” said Jason Lendvay, Assistant Vice President of
Huawei* M&T Bank. “We are working towards our move to UEM in
Q4 ’12
Apple conjunction with our Windows 7 to Windows 10 migration.
Q2 ’13 We see the Windows 10 OS and modern management capa-
Xiaomi*
bilities are a key enabler for our move to UEM, which is a
Q4 ’13 OPPO primary reason why we are looking to move towards UEM
LG* at this time.”19 In the Forrester Wave Report, they evaluated
Q2 ’14 the 12 most significant UEM providers in the market. On a
Lenovo*
scale of 0 (weak) to 5 (strong), BlackBerry got a 4.32 in
Q4 ’14 ZTE* market presence, and 5 in both Application and Network
Vivo security. One of the other leaders in the market, IBM, got a
Q2 ’15 3.68 in market presence, and 5 and 3 in Application and
Sony* Network Security, respectively (see Exhibit 3). Customers
Q4 ’15
RIM* frequently cite the security benefits of BlackBerry’s Secure
Q2 ’16 Connectivity service as well as the strong app and data-level
HTC
security features included with the platform.20
Q4 ’16 Nokia* Cylance, BlackBerry’s recent acquisition, shifted the nar-
Others rative from BlackBerry’s homegrown services to those orig-
Q2 ’17 inally developed at Cylance. Cylance grew at a 92 percent
year-over-year (YoY) rate during 2018 (see Exhibit 4). In its
Q4 ’17 Q4 2019 Earnings report, Chen praised Cylance, stating
that in joining forces with BlackBerry Spark, it “will make
Q2 ’18 our endpoint management and embedded software prod-
ucts stronger and more essential for enterprises to generate
Q4 ’18
value from the Internet of Things.”21 Cylance uses AI such
Q2 ’19
as algorithmic science and machine learning to protect mo-
bile devices, tablets and other Internet-connected devices
0% 25% 50% 75% 100%
from cyber-attacks. Over 20 percent of Fortune 500 compa-
nies use its solutions.22
Share of shipments
BlackBerry’s QNX real-time operating system enables
Source: Statista, 2018 automakers to build secure and scalable software solutions
for connected and autonomous cars. Audi, BMW, Jaguar
Land Rover, and Toyota use the software for infotainment
submarket as “The Enterprise of Things.”17 BlackBerry de- systems, acoustics, and dashboard functions. QNX is em-
fines the Enterprise of Things as the network of smart- bedded in 125 million vehicles today. The road ahead for
phones, computers, vehicles, sensors, equipment, and other BlackBerry in 2019 requires successful execution of strate-
online devices within the enterprise that communicate with gies that support embedded operating systems, Internet of
each other to enable smart business processes that span Things platforms, and security solutions.23
across people, connected endpoints, and their data. The
vulnerabilities in the Enterprise of Things has opened a
plethora of cybercrimes and has given a way for hackers to Smartphones
access enterprise networks. This has resulted in an in- Apple, Inc. entered the smartphone industry in 2007 when its
creased requirement in the Endpoint Security Software In- CEO, Steve Jobs, introduced the world to the company’s new-
dustry. The Endpoint security market is projected to surpass est innovation, the iPhone. Apple had a completely different
$7.5 billion in 2025.18 Some of the key players in the end- strategy from that of BlackBerry; Apple’s strategy was to cater
point security market include McAfee, Microsoft, and to all the smartphone customers and not just the corporations.

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 EXHIBIT 3  Unified Endpoint Management Providers, Q4 2018

Vendor Product and version evaluated Product version evaluated

BlackBerry BlackBerry UEM V12.7.2
Cisco Meraki Systems Manager
Citrix Systems Citrix Endpoint Management 10
IBM IBM MaaS360 10.70
Ivanti Ivanti Endpoint Manager (EPM) 2018 release
Jamf Jamf Pro 10.7
Kaspersky Lab Kaspersky Endpoint Security for Business 11
Matrix42 Matrix42 Unified Endpoint Management 2018 release
Microsoft Enterprise Mobility + Security
MobileIron MobileIron 55 (Cloud) v10 (on-premises)
Sophos Sophos Central (Mobile UEM) 8.5
VMware Workspace One 9.6
Source: 2018 Forrester research, Inc. The Forrester WaveTM: Unified Endpoint Management, Q4 2018.

Stronger
current
offering Mobilelron VMware
IBM 4 5
5

Leaders
Citrix Systems
3 Microsoft
BlackBerry 5
Matrix 42 1 5
2 Sophos

Strong
3 Ivanti Performers
Cisco
2
1 3 Jamf
Kaspersky Lab

Contenders

Weaker
current Challengers
offering
Weaker strategy Stronger strategy
Market presence*
1 2 3 4 5
lower higher
*A double-circled marker indicates incomplete vendor participation.
Source: 2018 Forrester research, Inc. 2018. The Forrester WaveTM: Unified Endpoint Management, Q4.

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 EXHIBIT 4  Cylance Inc. Consolidated Statement of type.”24 BlackBerry’s inventor believed that consumers
Operations (in thousands) ­preferred typing e-mails and messages using a physical
­keyboard rather than using a touchscreen. Co-CEO Balsillie
CYLANCE INC. declared that the iPhone was “not a sea-changer for
Consolidated Statements of Operations
(in thousands) BlackBerry.”25
With further developments in touchscreen phones, con-
Year Ended April 30, sumers cared more about iPhone and Android phones’ ac-
2017 2018 cess to applications rather than battery life, security
features, and QWERTY keyboards. The touchscreen smart-
Revenue: phones also gained traction among suppliers. Software de-
 Subscription $ 54,153 $105,207 velopers found it easier to work with Android and iPhone
systems as compared to BlackBerry’s complex Java-based
 Services 15,252 28,724 system. Consequently, iPhone and Android phones experi-
enced rapid growth and market acceptance, which created
  Total revenue 69,405 133,931
internal tensions within RIM.
Cost of revenue: When it was unable to acquire a license to sell iPhones,
Verizon contacted RIM with an offer to collaborate on de-
 Subscription 15,333 27,095
veloping an “iPhone killer,” which meant a smartphone
 Services 13,404 20,177 with touchscreen capabilities and no QWERTY keyboard.
The result of this partnership was the “BlackBerry Storm,”
   Total cost of revenue 28,737 47,272 which unfortunately did not gain popularity among con-
   Gross Profit 40,668 86,659 sumers because the Storm’s touchscreen was not easy to
use, and the device was slow and full of bugs. RIM tried its
Operating Expenses: luck with a touchscreen phone once again in 2010, when
  Sales and marketing 107,589 108,529 AT&T contracted with the company to make a competitor
to the iPhone. This could help AT&T to differentiate itself
  Research and development 48,793 64,747 from Verizon, which now had obtained licenses for the sale
  General and administrative 24,862 26,343 of the iPhone. The result was the “BlackBerry Torch,” but
this too was not a commercial success.
Total operating expenses 181,244 199,619 Even though iPhone and Android phones were gaining
Loss from operations (140,576) (112,960) market share rapidly, Lazaridis remained optimistic about
the BlackBerry’s sustainable advantage. He warned his fel-
  Other expenses, net (331) (625) low RIM directors in a board meeting that trying to sell all-
touch smartphones in a crowded market would be a huge
Loss before income taxes (140,907) (113,585)
mistake. Lazaridis maintained full confidence that RIM
  Provision for income taxes 142 739 would catch up to Apple and Google (Android) with their
newest device, the BlackBerry 10. While developing the
Net Loss $(141,049) $(114,324)
BlackBerry 10, Lazaridis decided to acquire QNX Software,
a leading-edge software maker. QNX had the technology
Source: Form 6-K. BlackBerry Limited, April 2019.
that the BlackBerry 10 operating system needed.
Despite RIM’s diminishing position in the industry,
its management continued to remain optimistic. Andrew
Steve Jobs and management at Apple believed that the indi- MacLeod, former managing director for the United States
vidual consumer would drive the next surge in the market. and Canada, stated, “I am heartened by the fact that we have
Clearly, RIM’s management did not believe that the market tons of assets-IP assets, technology assets. We have a culture
was shifting, and BlackBerry continued to enhance what it that at its core is about innovation and are in an industry
thought made its product great: battery life, security, and that moves incredibly fast.”26 This signaled that there was a
e-mail. In 2006, corporations accounted for the majority of belief internally at BlackBerry that its core competencies
RIM revenues, and the company intended to keep enter- could redefine the industry with new innovations. Lazaridis
prises as its main target market. Lazaridis believed that the solidified this notion in an interview to the Globe and Mail:
iPhone would be a fad and could not understand why any- “Many companies go through cycles. Intel experienced it,
one would want an iPhone, given its poor battery life and IBM experienced it, and Apple experienced it.” He went on
capacity. He was also extremely skeptical of the touch- to say, “People counted IBM, Apple, and other companies
screen keyboard. In an interview in 2007, Balsillie said, “As out only to be proven wrong. I am rooting that they are
nice as the Apple iPhone is, it poses a real challenge to its wrong on BlackBerry as well.”27
users. Try typing a web key on a touchscreen on an Apple To generate revenue for RIM, Balsillie saw great poten-
iPhone, that’s a real challenge. You cannot see what you tial with the BBM messaging service as well. The BBM
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 messenger was developed as an application for the Black-
Berry in 2005, and it enabled users to communicate by us-
ing their devices’ PIN numbers. The BBM was innovative
and is credited with being the first instant messaging ser-
vice on wireless devices. Among the BBM’s key strengths
were its reliability and the fact that users could send an un-
limited number of messages without any extra cost, unlike
standard SMS text messaging. Further, the messaging ser-
vice was very secure and gave users the privacy they sought.
With increasing competition and the decreasing sales and
market share of BlackBerry, Balsillie wanted to make the
BBM platform available on all devices. He envisioned that
telecom carriers could integrate BBM as their own en-
hanced version of SMS text messaging. This could generate
additional sales for the carriers, which would get RIM a per-
centage of the carriers’ revenues.
In 2019, Emtek, the company that took over the BBM in
2016, announced that it would be shutting down the BBM
consumer service on May 31, 2019. In a blog post they
­explained the unsuccessful efforts to revamp the once popular
application: “The technology industry however, is very fluid,
and in spite of our substantial efforts, users have moved on to
other platforms, while new users proved difficult to sign on.”28
Operations of BlackBerry
Under Chen’s leadership, BlackBerry intended to return to
its core strengths that catered to enterprises with security
and efficiencies. Chen’s first task as CEO was to restruc-
ture the operating units. By 2019, the company had four
distinct operating segments from which it drew revenue:
Enterprise Software and Services; BlackBerry Technology
Solutions (“BTS”); Licensing, IP and Other, Handheld
Devices; and Service Access Fees (“SAF”).29 Chen believed
this structure would lead BlackBerry to an increased focus
on software services. BlackBerry also continued to remain
popular with governments; all seven G7 countries’ govern-
ments were BlackBerry customers.
Chen is highly credited for his turnaround strategy in-
volving BlackBerry. Prior to BlackBerry, he steered Sybase’s
trajectory toward financial gains. Chen pivoted the data-
base and business services company into the emerging
mobile information sector. The move proved brilliant.
Mobile information generated hundreds of million dollars
in annual revenue, returning Sybase to profitability.30 Sybase
was then sold to SAP for $5.8 billion. After he came to
BlackBerry in 2013, his strategy to put aside the mobile
hardware business and shift BlackBerry’s focus to cyberse-
curity and embedded software has proven successful for the
company, with the majority of its revenue and growth com-
ing from its software and services.
Although BlackBerry’s revenue had dropped from $19.9
billion in FY2011 to $904 million in FY2019, its stock be-
gan to climb out of a deep dive as revenue and profits beat
expectations, in comparison to the past couple of years.
CEO John Chen estimated that BlackBerry’s current 2020
financial year would see a revenue growth of between 23
Strategic Management: Text and
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and 27 percent.31 (see Exhibits 5 and 6 for detailed informa-
tion regarding BlackBerry’s financial situation).
Competition
BlackBerry’s software security division consists of a long list
of companies providing a wide range of different types of
enterprise security. However, BlackBerry Limited specializes
in Mobile and Data Security for Enterprises. Providers of
enterprise software solutions that compete with BlackBerry’s
BlackBerry Enterprise Mobility Suite include VMware Inc.,
Microsoft Corporation (“Microsoft”), Citrix Systems, Inc.
(“Citrix”), MobileIron Inc., SOTI Inc., Sophos Ltd., and
IBM Corporation. Providers of endpoint security technolo-
gies that compete with the BlackBerry Cylance platform in-
clude McAfee, Microsoft, and Symantec. Providers of
embedded software that compete with the Company’s Black-
Berry QNX automotive business include customized Linux
open-source operating system providers, Wind River Sys-
tems, Green Hills Software, Mentor Graphics Corporation
and SYSGO AG.32 Although BlackBerry does not consider
itself to be in the smartphone market anymore, BlackBerry’s
two most significant competitors in the smartphone indus-
try were Apple and Samsung Electronics Co.
Microsoft Corporation
Established in 1975, Microsoft initially entered the Operat-
ing System (OS) business in 1980 with their own version of
Unix, called Xenix. Enterprise Mobility + Security (EMS)
is a bundle of Microsoft products that includes Advanced
Threat Analytics, Azure Ad Premium, Azure information
Protection, Cloud App Security, intune, and System Center
Configuration Manager (ConfigMgr).33 Although competi-
tors in the Unified Endpoint Management market, in 2018,
BlackBerry and Microsoft partnered to offer enterprises a
solution that integrates BlackBerry’s expertise in mobility
and security with Microsoft’s unmatched cloud and produc-
tivity products. Carl Wiese, president of Global Sales at
BlackBerry explained the alliance: “We saw a need for a
hyper-secure way for our joint customers to use native
Office 365 mobile apps. BlackBerry Enterprise BRIDGE
addresses this need and is a great example of how BlackBerry
and Microsoft continue to securely enable workforces to be
highly productive in today’s connected world.”34
VMware
VMware is a global leader in cloud infrastructure and digi-
tal workspace technology that accelerates digital transfor-
mation for evolving IT environments. Over the past year,
VMware has invested heavily in helping customers embrace
modern management with AirWatch, an enterprise mobil-
ity management (EMM) technology that powers VMware
Workspace ONE. Workspace ONE provides unified end-
point management and a seamless user experience for ac-
cessing any app on any device, across knowledge worker,
line of business (LOB), high security, and any other use
CASE 36 :: BLACKBERRY IN 2019  C303
 EXHIBIT 5  BlackBerry Consolidated Statement of Operations
BlackBerry Limited
(United States dollars, in millions, except per share data)
Consolidated Statements of Operations
For the Years Ended
February 28, 2019 February 29, 2017 February 28, 2016
Revenue $904 $932 $1,309
Cost of sales 206 262 542
  Inventory write-down — — 150
Gross margin 698 670 617
Operating expenses
  Research and development 219 239 306
  Selling, marketing and administration 406 467 553
 Amortization 136 153 186
  Impairment of goodwill — — 57
  Impairment of long-lived assets — 11 501
 Loss on sale, disposal and abandonment of 3 9 171
long-lived assets
  Debentures fair value adjustment (117) 191 24
Arbitration awards and settlements, net (9) (683) —
Operating income (loss) 60 283 (1,181)
  Investment income (loss), net 17 123 (27)
Income (loss) before income taxes 77 406 (1,208)
Provision for (recovery of) income taxes (16) 1 (2)
Net income (loss) 93 405 (1,206)
Earnings (loss) per share
 Basic 0.17 0.76 (2.30)
 Diluted 0.00 0.74 2.30

Source: Annual Report. BlackBerry Limited, February 28, 2019.

case in organizations. In 2019, Dell introduced Unified
Workspace, a comprehensive solution to help IT deploy, se-
cure, manage, and support endpoints from the cloud. Dell
teamed up with VMware; Workspace ONE transforms and
automates every phase of PC management—from configura-
tion to onboarding to pushing regular updates—and is the
backbone of Dell Technologies Unified Workspace.35
McAfee
A familiar name that comes to mind when we think of
cyber security is McAfee. Its products help secure
computers, endpoints, networks, and cloud from viruses,
malware, and other security threats. McAfee was pur-
chased by Intel in February 2011 to build Intel’s security
division of online computing. “With the rapid expansion
of growth across a vast array of Internet-connected de-
vices, more and more of the elements of our lives have
moved online,” said Paul Otellini, former Intel president
and CEO. “In the past, ­energy-efficient performance and
connectivity have defined computing requirements. Look-
ing forward, security will join those as a third pillar of
what people demand from all computing experiences.”37

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 EXHIBIT 6  BlackBerry Balance Sheet
BlackBerry Limited
United States dollars, in millions)
Consolidated Balance Sheets
As at
February 28, 2019 February 29, 2018
Assets
  Current
   Cash and cash equivalents $ 48 $ 816
  Short-term investments 368 1,443
   Accounts receivable, net 194 151
  Other receivables 19 71
   Income taxes receivable 9 26
   Other current assets 56 38
Total current assets 1,194 2,545
Restricted cash and cash equivalents 34 39
Long Term Investments 55 55
Other Long term investments 28 28
2 2 3
Property, plant and equipment, net 85 64
Goodwill 1,463 569
Intangible assets, net 1,068 477
Liabilities 3,929 3,780
  Current
  Accounts payable $ 48 $ 46
  Accrued liabilities 192 205
   Income taxes payable 17 18
  Deferred revenue 214 142
Total current liabilities 471 411
Deferred revenue, non-current 136 53
Other long-term liabilities 19 23
Long-term debt 665 782
Deferred income tax liability 2 6
Total liabilities 1,206 2,326
Shareholders’ equity 2,688 2,560
Capital stock and additional paid-in capital
  Issued - 530,497,193 voting common shares (February 29, 2016– (20) (10)
521,172,271)
Retained earnings (deficit) 2,636 2,505
Accumulated other comprehensive loss $3,929 $3,780

Sources: Annual Report. BlackBerry Limited, February 28, 2019.

CASE 36 :: BLACKBERRY IN 2019  C305

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 In 2014, Intel announced the availability of a family of
hardware and software products called Intel® In-Vehicle
Solutions, which were paired with McAfee’s whitelisting
technology from Intel Security to fully secure the con-
nected car. CRN, a brand of The Channel Company,
added McAfee to its 100 Coolest Cloud Computing Com-
panies of 2019 list, and its annual Security 100 list.38
Wind River Systems
Wind River is a world leader in embedded software for in-
telligent connected systems. In 2018, Wind River an-
nounced that it would be acquired by TPG, a global
alternative asset firm. TPG was acquiring Wind River from
Intel. Nehal Raj, Partner and Head of Technology investing
at TPG said, “We see a tremendous market opportunity in
industrial software driven by the convergence of the Internet
of Things (IoT), intelligent devices, and edge computing.”39
In 2019, Wind River announced its achievement as the
leader in continued embedded real-time operating system
(RTOS) and commercial Linux revenues, according to
VDC Research. The company also ranked as the leading
commercial provider of both embedded hypervisors and
safe and secure operating systems.40
Apple Inc.
A major player in the smartphone industry is iPhone by
Apple Inc. The company has core competencies in product
design, software development, application development, and
hardware. Apple Inc. not only targets corporations and gov-
ernments as potential customers but also targets general
consumers, academic institutions, and small and medium-
sized enterprises (SMEs). Most of the Apple products are
sold through Apple’s own retail and online stores; however,
the company also utilizes indirect distribution channels such
as telecom carriers, wholesalers, retailers, and value-added
resellers. Another core competence for Apple is a continu-
ous focus on research and development (R&D), in order to
keep up with and lead technological advancements. Apple
Inc.’s R&D expenditure was about $14 billion by March
2019,41 which is more than most smartphone companies
were worth. A significant source of Apple’s competitive
strength is its ecosystem. Apple’s iCloud service enables us-
ers to sync a particular file or data on all Apple devices, so if
one edits a photo on iPhone, the changes show up automati-
cally on all other devices.42 These features give Apple users
an incentive to purchase other Apple products, because ben-
efits and convenience of use bring value to the consumer.
Samsung Electronics Co.
The other major player in the smartphone industry is the
South Korean tech giant Samsung Electronics Co. Samsung
maintains its leadership status across multiple sectors by
investing heavily in R&D. By 2019, Samsung was #1 in the
world for R&D spending, with $15.2 billion, according to
the European Commission R&D Scoreboard.43 Samsung
has strategic resources that competitors find hard to
C306  CASE 36 :: BLACKBERRY IN 2019
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replicate, such as substantial economies of scale, which
drive down per-unit cost. The company has a very favorable
cost structure because of its great efforts in vertical integra-
tion. Samsung has an aggressive pricing strategy and allo-
cates a large amount of resources toward marketing
expenditures. The company is a dominant force in the An-
droid operating system. With Android, consumers purchase
and download multiple applications, similar to Apple’s app
store. Samsung sells products to authorized distributors,
mainly through mobile network carriers or large electronic
outlets like Best Buy. Samsung offers a wide range of smart-
phones with low, medium, and high price points.
Future of BlackBerry
Although BlackBerry no longer calls itself a smartphone
company, its licensing partner, the Chinese consumer-
electronics company TCL, introduced a version of the
BlackBerry Key2 device. “It’s very important that we don’t
detach entirely from the phone; it is part of our heritage and
brand,” CEO John Chen told Barron’s in a March 2019 in-
terview in San Francisco.44 The smartphone industry experi-
enced rapid development and high growth during the past
decade. There were over 1.44 billion units of smartphones
sold worldwide in 2018 with total sales revenue reaching
$522 billion.45 Although that is a remarkable number, new
trends show that the smartphone industry growth rate has
started declining. The biggest driver of the 2017 shipment
downturn was the saturated market in China, which saw its
smartphone market decline 4.9 percent year-over-year.
Tough times are expected to continue, as IDC (global market
intelligence firm) forecasts consumption in China to decline
another 7.1 percent before flattening out in 2019.46
There is also low growth in North American and Western
European markets. Most individuals in these countries
already have smartphones, so growth was driven by replace-
ment sales due to a low number of first-time buyers. Despite
BlackBerry’s smartphone demise, and the end of the BBM
platform in 2019, the company still refers to itself as a pio-
neer in mobile messaging. After suing Facebook in 2018,
alleging patent infringement, BlackBerry also sued Twitter
for the same in 2019. The suit claimed that Twitter “created
mobile messaging applications that co-opt BlackBerry’s in-
novations, using a number of the innovative user interface
and functionality enhancing features that made BlackBerry’s
products such a critical and commercial success in the
first place.”47
By moving away from hardware, BlackBerry is focusing
attention on company strengths in software and services. In
2018, BlackBerry announced that its QNX software is em-
bedded in 120 million cars.48 The auto industry is expected
to transform through 2030. According to PwC, there are
five main trends that will influence this transformation.
The trends are electrified, autonomous, shared, connected,
and yearly updated. 49 As cars get smarter, BlackBerry will
experience more demand in the auto industry.
 BlackBerry is playing in both the Internet of Things and
enterprise mobility management segment of the cyber secu-
rity market. With its acquisition of Cylance, BlackBerry
adds to its arsenal of cybersecurity solutions that help
enterprises intelligently connect, protect, and build secure
endpoints. “BlackBerry . . . and their now approved acquisi-
tion of Cylance makes this a critical game changing mo-
ment for the company and the IoT industry. In today’s
hostile world, security isn’t an option, it is a requirement,”
said Rob Enderle, a technology analyst.50
Competing with big players such as Microsoft, Syman-
tec, and Cisco in the Internet of Things market, BlackBerry
prides itself on being an ideal fit for lightweight devices
while companies like Cisco and Symantec are geared more
toward large networked systems. “I don’t mind going after a
market with a lot of big players,” CEO Chen said. “That
means the market is appealing. Better that than to go after a
market with no big players.”51 Jack Gold, principal analyst at
J. Gold Associates, said, “BlackBerry is ‘a born-again
startup’. Their approach is let’s take what’s left of the DNA,
and let’s go after industries that need heightened security
such as health care, Wall Street, and government agencies.”52
ENDNOTES
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2. List of Blackberry acquisitions on Crunchbase.com. https://www.
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3. Press Release. 2019. BlackBerry completes acquisition of Cylance.
Blackberry, February 21, https://www.cylance.com/en-us/company/
news-and-press/press-releases/blackberry-completes-acquisition-of-
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4. Cybersecurity Company Awards—Winners and Finalists. 2019.
https://cybersecurity-excellence-awards.com/2019-cybersecurity-
company-awards-winners-and-finalists.
5. Blackberry. 2019. Annual Report.
6. Swartz, J. 2019. BlackBerry is looking to its past to find a new future.
Barron’s, March 11, https://www.barrons.com/articles/blackberry-
stock-revival-comeback-phones-51552083659.
7. Forrester research, Inc. 2018. The Forrester WaveTM: Unified
Endpoint Management, Q4.
8. Maclean, J. 2018. Blackberry’s future still unclear, Christine Poole
says. Cantechletter, December 13, https://www.canechletter.
com/2018/12/blackberrys-future-is-still-unclear-christine-poole-says/.
9. Breen, B. 2001. Rapid motion. Fast Company, July 31, https://www.
fastcompany.com/43377/rapid-motion.
10. Gillette, F., Brady, D., and C. Winter. 2013. The rise and fall of
BlackBerry: An oral history. Bloomberg, December 9, https://www.
bloomberg.com/news/articles/2013-12-05/the-rise-and-fall-of-
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11. CBC News. 2014. BlackBerry timeline: A tech titans roller coaster
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12. Reuters. 2013. BlackBerry timeline: From RIM to RIP? The Telegraph,
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14. Romero, S. 2001. The right connections; The simple BlackBerry allowed
contact when phones failed. New York Times, September 20, https://
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15. The Atlas.com. 2016. Global Smartphone Market Share Held by RIM
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16. Blackberry. The Enterprise of Things.
17. Pathfinder Report. 2017. Securing the Enterprise of Things.
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18. Press Release. 2019. At 7% CAGR, endpoint security market size is
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19. Lerner, S. 2018. To UEM, or not to UEM, that is the question.
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20. Forrester research, Inc. 2018. The Forrester WaveTM: Unified
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23. Ibid.
24. Arthur, C. 2012. RIM chiefs Mike Lazaridis and Jim Balsillie’s best
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technology/2012/jun/29/rim-chiefs-best-quotes.
25. Vara, V. 2013. How BlackBerry fell. The New Yorker, August 12,
https://www.newyorker.com/tech/annals-of-technology/how-
blackberry-fell.
26. Gillette, F., Brady, D., and C. Winter. 2013. The rise and fall of
BlackBerry: An oral history. Bloomberg, December 9, https://www.
bloomberg.com/news/articles/2013-12-05/the-rise-and-fall-of-
blackberry-an-oral-history.
27. Silcoff, S., Mcnish, J., and S. Ladurantaye. 2018. How BlackBerry
blew it: The inside story. The Globe and Mail, April 7, https://www.
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28. BBM blog. 2019. Time to say goodbye. BBM.com, April 18, https://
blog.bbm.com/2019/04/18/time-to-say-goodbye-english-version/.
29. Annual Report 2019. Blackberry.
30. Kastanes, J. 2018. BlackBerry under John Chen’s leadership. Seeking
Alpha, October 16, https://seekingalpha.com/article/4211973-
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31. Paddon, D. 2019. BlackBerry stock soars as revenue and profit beat
expectations. The Canadian Press, March 29, https://business.
financialpost.com/technology/blackberry-reports-us51-million-q4-
profit-beats-profit-and-revenue-estimates.
32. Annual Report 2019. Blackberry.
33. Forrester research, Inc. 2018. The Forrester WaveTM: Unified
Endpoint Management, Q4.
34. Microsoft News Center. 2018. BlackBerry and Microsoft partner to
empower the mobile workforce. Microsoft, March 19, https://news.
microsoft.com/2018/03/19/blackberry-and-microsoft-partner-to-
empower-the-mobile-workforce/.
35. Roszak, J. 2019. Dell and VMware transform how customers deploy,
manage and secure PCs. VMware Blog, May 1, https://blogs.vmware.
com/euc/2019/05/unified-workspace.html.
36. Forrester research, Inc. 2018. The Forrester WaveTM: Unified
Endpoint Management, Q4.
37. News Release. 2010. Intel to acquire McAfee. Intel Newsroom, August
19, https://newsroom.intel.com/news-releases/intel-to-acquire-
mcafee/#gs.bl7ep4.
CASE 36 :: BLACKBERRY IN 2019  C307
 38. Press Release, 2019. McAfee Cloud and Endpoint Security Solutions
Recognized by CRN. McAfee, February 24, https://www.mcafee.com/
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html?news_id=20190225005043
39. Calif, A. 2018. Wind River to be acquired by TPG. Wind River News,
April 3, https://www.windriver.com/news/press/pr.html?ID=20982.
40. Wind River. 2019. Wind River ranked global leading provider of
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41. Elmer-DeWitt, P. 2019. In defense of Apple’s $14 billion R&D budget.
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42. Jackson, E. 2014. Apple isn’t a hardware or software company–It’s an
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43. Hernández, H., Grassano, N., Tübke, A., Potters, L., Gkotsis, P., and
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44. Swartz, J. 2019. BlackBerry is looking to its past to find a new future.
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45. Press Release, 2019. Global Smartphone Sales Reached $522 Billion
in 2018. GfK Global, February 22, https://www.gfk.com/insights/
press-release/global-smartphone-sales-reached-522-billion-in-2018/
46. Deans, D. 2018. Why the worldwide smartphone market continues to
be sluggish.Telecoms Tech News, June 1, https://www.
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47. Dickey, M. R. 2019. BlackBerry sues Twitter for patent infringement.
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48. Press Release. 2018. BlackBerry QNX Technology now embedded in
120 million vehicles on the road today. BlackBerry News, June 6,
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49. Pwc Report. 2018. Five trends transforming the automotive industry.
PwC. https://www.pwc.com/gx/en/industries/automotive/assets/pwc-
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50. Blaize. 2019. BlackBerry’s strategic acquisition of cylance is now
complete. CrackBerry, February 21, https://crackberry.com/
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51. Swartz, J. 2019. BlackBerry is looking to its past to find a new future.
Barron’s, March 11, https://www.barrons.com/articles/blackberry-
stock-revival-comeback-phones-51552083659.
52. Ibid.