BlackBerry delivered a solid fourth quarter that surprised analysts, shipped 1 million Z10 devices and may have set itself up for profitability in the future. The biggest key to BlackBerry's sustained success will be the adoption of BlackBerry Enterprise Server 10.
BES 10 is critical on a few fronts for BlackBerry. Consider:
- The platform is BlackBerry's major foray into mobile device management and managing BlackBerry 10 devices as well as Apple's iOS and Android.
- Should BlackBerry successfully enter the MDM market and shine it will produce a business model that is diversified from devices.
- BES 10 success would keep BlackBerry's core enterprise customers in place. For all the talk about bring your own device and consumers, BlackBerry need to retain its enterprise base.
On a conference call with analysts---BlackBerry reported fourth quarter earnings of $94 million, or 18 cents a share, on revenue of $2.7 billion, down 36 percent from a year ago---CEO Thorsten Heins talked up interest in BES 10. More: Cheaper BlackBerry 10 handset due around September, BlackBerry chief confirms | BlackBerry earnings: 10 key things CEO Thorsten Heins said on the call | BlackBerry Q4 better than expected; 1M BlackBerry Z10 devices shipped
The initial early global demand for BES 10 has been better than anticipated...We see strong interest from our corporate customers in maintaining the BES install base.
With BES 10, customers will experience the BlackBerry 10 platform with continued confidence and the comfort of the unmatched BlackBerry security. We've also loaded BES 10 with new capabilities and a more comprehensive set of features, including security for iOS and Android devices through our Secure Work Space product. BlackBerry is the most widely deployed mobility solution in enterprises and government today.
BES 10 will be critical to ensuring that BlackBerry remains relevant in the enterprise. If BlackBerry loses backend traction in companies, its fate will rest with consumers and whether they bring BlackBerry 10 devices to work. These consumers thus far have been all about iOS and Android.
Indeed, analysts were skeptical about the company's BlackBerry 10 device momentum going forward. Analysts noted that BlackBerry shipped about 1 million BlackBerry 10 devices, but may have been stocking its channel. Those shipments will continue in the next quarter. Only then, will BlackBerry 10 sell through be revealed.
As a hedge to BlackBerry 10 adoption, the company needs BES to shine. Jefferies Peter Misek has argued that BlackBerry can become a leading mobile device management (MDM) player and attack players ranging from Good Technology to Citrix's Zenprise unit to AirWatch and MobileIron. Misek said:
While most near-term focus continues to be on the phone, we believe BlackBerry's MDM opportunity is underappreciated. BES10 is currently being widely trialed by corporations even before a streamlined server-side implementation of BES10 is launched in May and BYOD sandboxing availability in June. We believe AT&T will heavily support BES10 with it possibly becoming AT&T's preferred MDM partner across all channels. We think BlackBerry's MDM software will gain traction throughout this year and see a significant ramp in revenues next year.