BlackBerry faces competition in APAC, but can tap existing customer base
BlackBerry's repositioning as a software and security vendor faces competition in Asia-Pacific from pure-play market players, but it can tap certain markets in the region where it has strong customer base.
CEO John Chen last year said BlackBerry would stop developing hardware internally after it failed to regain profitability in a business that once brought much success for the company. Instead, it would focus on enterprise software and mobile security, and license its hardware brand to third-party manufacturers such as China's TCL Communication.
Describing the change in focus as a "good strategic move, Ovum's principal analyst Clement Teo said much of BlackBerry's growth would be fuelled by security, where the vendor already had established a good reputation from its messaging platform. It also had invested in security consulting services and capabilities, he said in an e-mail interview.
Teo noted that while BlackBerry would struggle against the likes of pure-play security vendors such as Symantec and Trend Micro in Asia-Pacific, the former should be able to build on its existing customer base in markets such as India and Indonesia, where it had strong brand affinity.
To further differentiate its services, he suggested that Blackberry beefed up its consulting offerings to help enterprise customers address security gaps. In this aspect, it should partner systems integrators with strong cybersecurity focus, such as Deloitte and IBM, the analyst said.
Paul Crighton, BlackBerry's Asia-Pacific and Japan vice president, said the company had made good strides in its transformation, spending US$1 billion on acquisitions that included Good Technology and WatchDox aimed at strengthening its capabilities in mobile security and enterprise mobility.
In an interview with ZDNet, Crighton insisted that BlackBerry had "made the turn" and customers no longer questioned the company's financial standing. He noted that its software revenue surpassed its hardware revenue for the first time in its fourth-quarter results, accounting for the bulk of the company's overall revenue and growing 21 percent.
US and Europe, though, still were BlackBerry's bigger regions, with Asia-Pacific Japan contribution about 14.5 percent of the company's global software revenue, said Crighton, who joined BlackBerry two years ago from the Good acquisition.
However, the vendor was seeing strong growth in this region, he said, but declined to provide more details regarding how much each region contributed to overall revenue.
He did note that the financial services sector was its strongest, with BlackBerry supporting about 90 percent of the world's largest organisations in the vertical.
In terms of key growth markets in the region, Crighton pointed to Australia and New Zealand, Japan, Greater China, and Indonesia. Indonesia, specifically, was home to one of BlackBerry's largest user base and offered significant growth potential as local enterprises began to embrace enterprise mobility and seek out mobile security tools, he said.
There also were growth opportunities in Singapore, Hong Kong, and Shanghai, which were popular regional hubs for global financial services providers, he noted. He further highlighted healthcare as another vertical BlackBerry was keen to tap in Asia-Pacific.
He added that its acquisition of QNX helped establish the company's footprint in autonomous and connected vehicles and, coupled with Good's container technology, would provide the security and application development platform enterprises needed to adopt Internet of Things.
In its first quarter results, BlackBerry reported a lower-than-expected sales in its software and services business, pulled down by a drop in orders. It still clocked a profit of US$671 million on revenue of US$235 million for the quarter, down from US$400 million in the previous year.
from Latest Topic for ZDNet in... http://ift.tt/2uWw4Jh