The new CEO, John Chen, can effectively help BlackBerry (NASDAQ:BBRY) survive by using his Sybase experience to help the struggling Canadian company generate more enterprise sales. BlackBerry has lost the war for consumer smartphones. Its only salvation rests on increasing its strong presence in the enterprise market.
Despite the rave reviews of its new Z30 handset which it launched last September, BlackBerry's share of the consumer smartphone market took another major dive. Kantar Media's latest phone sales data for three months leading to October shows the BlackBerry's share of smartphones sales is lower than 1% in the U.S., China, Japan, and Spain. Furthermore, the Kantar report also showed that Microsoft's Windows 8 phones sold more than 4x than BlackBerry phones in the U.S. BlackBerry's U.S. share is only 0.8% while Windows-branded phones gained 4.8% of the market.
This data clearly shows BlackBerry has lost the war for consumer phones. BlackBerry's latest OS and phone models are not enough to make it compete with the juggernauts of iOS and Android OS. It should just give up and stop incurring losses like what it suffered with the BlackBerry Z10.
I am not saying that BlackBerry totally abandon its phone hardware business. I believe that the only way its phone business can continue to operate is to treat it like a niche product geared towards corporate and government clients.
BlackBerry Can Repeat Chen's Success at Sybase
John Chen's incredible management that turned Sybase from a money-losing lemon into a mobile data management behemoth that SAP AG bought for $5.58 billion in 2010 makes me believe that BlackBerry is now solidly focused on the enterprise sector.
Bloomberg highlighted the similarity between Sybase and BlackBerry, both firms are taken over by Chen while they are already on the brink of bankruptcy. BlackBerry is lucky to have Chen at its helm. Sybase achieved a tremendous turnaround thanks to John Chen's amazing re-invention of the company's business model. Chen repositioned Sybase database expertise to being a wireless enterprise data management venture.
BlackBerry is predicted to adapt Chen's Sybase program, "Unwired Enterprise" strategy, to take advantage of its dominant presence in the corporate world. It is an open secret that BlackBerry is still the first choice among security-conscious corporations and governments. President Barack Obama's latest statement that he can't use an iPhone because of security reasons and is still a proud BlackBerry owner.
Enterprise is where the Big Money is
BlackBerry's latest release of its cross-platform BlackBerry Enterprise Service 10 (BES version 10.2) is a clear move to tighten its dominant grip on the Enterprise Mobility Management (EMM) solutions market. This latest edition now offers support for Apple iOS and Android OS-powered smartphones and tablet devices.
The new support for non-BlackBerry devices is a great tactic to win more corporate and government clients who are still not using BlackBerry phones. The enterprise mobility management service market is expected to grow into a $138.6 billion business by 2017. BlackBerry's Bring Your Own Device (BYOD) approach to enterprise mobility has fortified its leadership position from rising competition.
More Fortune 500 companies still trust the BlackBerry brand when it comes to their critical enterprise mobility management. Clients like Morgan Stanley (NYSE:MS) and Boeing (NYSE:BA) trust BlackBerry. There are over 30,000 BES10 servers running in the world today. The new support for iOS and Android phones will help BlackBerry gain more clients. BES 10 aims to give a BlackBerry-level of security protection to other mobile phones and web-enabled devices.
BlackBerry is the only EMM vendor and handset maker to receive the U.S. Department of Defense "Authority to Operate" certification. This strong endorsement is another good reason why more companies, universities, private organizations, military units, and government offices should keep on relying on BlackBerry smartphones and enterprise mobile management solutions.
BlackBerry is more than just a smartphone handset maker. John Chen possesses the right experience to help BlackBerry survive the collapse of its consumer sales. The enterprise mobile management service market is big enough for BlackBerry to continue operating for the next decade.
Even prior to the arrival of John Chen, BlackBerry was already making significant inroads to corporate Mobile Device Management. Chen is likely to use the new $1 billion cash infusion to improve BlackBerry's EMM efforts rather than waste it again to prop up the plummeting consumer sales of its handsets.
Buy BBRY at below $6.50 and go for a very long-term play.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.