After hitting bottom, the only way Blackberry can go is up


I was dead, but I got better.

Blackberry is salvaging something out the wreckage of its mobile phone business, by porting its BBM chat service – formerly Blackberry Messenger – to the iOS and Android platforms. And it’s claiming a fair amount of success. According to a spokesman at this evening’s Showstoppers CES press, Blackberry has doubled its BBM user count – going from 40 to 80 million users worldwide – in the two months or so since it launched its iPhone and Android apps.

In the coming weeks, Blackberry plans to add a Skype-like voice service, where BBM users can talk to each other for free over the Internet. BBM’s selling proposition is that it’s secure – Blackberry still boasts a solid reputation and technology on that count – and verifiable. The service lets users know when messages have been delivered and read.

There’s no charge for either the app or the service, and Blackberry isn’t generating any other revenue with it yet. But it does have plans to eventually monetise its user base through advertising, likely via sponsored messages.

BBM is being run as a separate business. Blackberry’s new CEO has reorganised the company into four independent units: messaging, machine-to-machine services, back end enterprise services (which is also cross-platform) and its once dominant smart phone business, which now has fewer customers than BBM.

Blackberry will be an emaciated shell, but it won’t die. The hardware business will shamble along, likely for years, with slow-to-change government customers, and the other three units can usefully cherry pick Blackberry’s deep base of proprietary technology. Going forward, survival is success.

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems. His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California. Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.