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BlackBerry's Security No Longer Legendary (UPDATED)

|Includes: Apple Inc. (AAPL), BB, SSNLF
Summary

'El Chapo' Guzmán caught by hacking his BlackBerry.

Dutch police hack into 'uncrackable' Blackberry.

Regarding the PRIV's security: "We're probably the same level as Samsung's KNOX" - John Chen.

BlackBerry (BBRY) has long been known for its 'superior' security, and even their latest smartphone, the BlackBerry PRIV, goes so far as basing the name on the word PRIVacy.

But it's no longer clear that the PRIV, or any of BlackBerry's other smartphones, can live up to the 'most secure smartphone' hype any longer.

'El Chapo' Guzmán caught by hacking his BlackBerry

About a year ago, the notorious El Chapo Guzmán was captured by D.E.A., the U.S. Marshals, and the Department of Homeland Security by hacking his BlackBerry smartphone.

Not only were law enforcement officials able to locate Guzmán through triangulation, they were able to decode his messages and emails:

It has been reported, erroneously, that Guzmán used a satellite phone; in fact, his favored communication device was the BlackBerry.
The D.E.A. agents who monitored his e-mails and texts marvelled at the extent to which his communications seemed focussed not on managing his multinational empire but on juggling the competing demands of his wife, his ex-wives (with whom he remained cordial), his girlfriends, and his paid consorts. "It was like 'Peyton Place,' " a former law-enforcement official who kept track of the communications told me. "It was a non-stop deal."

Source: newyorker.com

Dutch police hack into 'uncrackable' Blackberry

THE HAGUE, Netherlands - Dutch police confirmed Wednesday, January 13, they have found a way to hack into messages on Blackberry data-encrypted smartphones, which claim to be the world's most secure communications devices.

Even deleted emails could "largely" be recovered, although police could not hack into the phones from a distance, but had to have them in their hands, the website said, linking to a number of excerpts from what it said were NFI reports.

It could prove a blow to Blackberry, which is beloved by many governments -- including in the United States, where White House officials are routinely issued with the devices in a bid to keep email communications as secure as possible.

According to one of the extracts published by the Dutch website dating from January 2015, the police had extracted some 325 encrypted emails from a Blackberry 9720 and managed to open 279 of them.

Source: rappler.com

Canadian RCMP Can Decrypt PGP BlackBerrys Too

The Blackberry associated to McKinnon, seized from the glove box of the Tacoma, with the PGP account of RodimusPrime that contained encrypted messages to and from the Mandingo, BigCountry, SpaceShuttle and Golfman accounts; and

The Blackberry associated to Powers, seized from the rear of the gold Sienna, with the account of SpaceShuttle that contained encrypted messages to and from the other PGP accounts;

[21] Expert witnesses testified about the extraction of information from the two laptops, the Blackberries and the cell phones, as well as the nature of GPS tracking devices. GPS tracking information was extracted from the laptops and encrypted emails were extracted from the Blackberries and decrypted by the RCMP Technical Assistance Team. No issue was taken about the manner in which this information was extracted.

Source: THE SUPREME COURT OF BRITISH COLUMBIA

Regarding the PRIV's security: "We're probably the same level as Samsung's KNOX."

As I covered in a recent article, and with the possible exception of custom modifications to the Linux kernel, most if not all of the security features BlackBerry is touting in its PRIV smartphone are already available in Apple's (NASDAQ:AAPL) iPhone and Samsung (OTC:SSNLF) smartphones.

Conclusion:

So what's left? The one trump card BlackBerry has been able to leverage over the years is its security; but today it looks like BlackBerry phones are no more secure than anything else, and in fact:

We're probably the same level as Samsung's KNOX. The only other commercial phone that can say they have the same or better than us is maybe the BlackPhone.

John Chen, CEO BlackBerry

Without categorically better smartphone security, I don't see BlackBerry as anything but a sell or trade. I see little to no long-term prospects for this company.

Disclosure: I am/we are short BBRY.

Additional disclosure: I have a BBRY Jan 22, $7.50 strike Straddle