Focus On Security May Fuel BlackBerry's Turnaround

| About: BlackBerry Ltd. (BBRY)

BlackBerry (NASDAQ:BBRY) got some welcome good news with the Department of Defense disclosing that it had 80,000 BlackBerry devices Which comprised 98% of the devices on its new Pentagon mobile management system with BES 10.1 as the backbone. I have long believed that the real strength of BlackBerry was secure communications and to date there has been no real challenge to the BlackBerry dominance in security, despite efforts by competitors to enter this space.

Worldwide armed forces total well over 10 million soldiers. The United States, China, South Korea, North Korea and India all have forces with more than 1 million personnel. The military market alone could be a very profitable niche for BlackBerry.

Police forces are another market where security of communications is paramount. There is something like 5 to 6 million police worldwide about 700,000 of them in the United States alone. Over 25 million people are employed by governments, another market where secure communications are of key importance.

BlackBerry already has a large presence in governments and it should remain a key market for the company.

Just this cursory review identified some 40 million potential BlackBerry customers where no other product can match its functionality.

I have always believed the real value of BlackBerry is its security augmented by its ease of use and the tremendous value I have always placed on BBM messaging. I have found it to be the most reliable way to get a message to any of my children scattered around the globe and typically an instant response.

Recent remarks by CEO John Chen reinforce my view that BlackBerry will survive as a supplier of end to end secure mobile communications for governments, hospitals, and large enterprises. As Chen remarked in his December 2, 2013 open letters to customers about the Bring Your Own Device trend: "BYOD users may be able to bring any device to work, but it's our job ensure the risk doesn't follow them in."

Turning BlackBerry around is a long shot. I had all but given up hope until Chen's appointment and the decisive way he has taken the helm. I now think it has speculative appeal and I am long BlackBerry calls on 10,000 shares at $12 strike expiring in January 2016.

Disclosure: I am long BBRY, . 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.