BlackBerry announced earlier this month its intention to divide its IoT and cybersecurity divisions. It is hoping to target a subsidiary initial public offering for the IoT business next fiscal year.
The former smartphone producer, which at its peak owned over 50% of the US smartphone market, has increasingly looked at expanding its other offerings since discontinuing their production in early 2022.
BlackBerry therefore joins the like of Nokia, who gave up on consumer product production (selling to Microsoft), to focus on a leaner corporate structure; this segmentation between IoT and cybersecurity is aimed at investors to evaluate their businesses separately.
The company reported its second-quarter results and posted total revenue of $132 million, down from $168 million a year earlier; its IoT revenue was $49 million, while cybersecurity revenue came in at $79 million.
The company’s foray into IoT goes back to their QNX acquisition in 2010. Yet its development of Project Ion In 2014 saw it developing a secure IoT platform. This project focused on providing a secure foundation for connecting and managing IoT devices, emphasising the importance of data security in IoT. BlackBerry’s expertise in security was a major selling point for its IoT offerings.
BlackBerry since entered the asset tracking and monitoring space with the launch of BlackBerry Radar. This solution, aimed at the transportation and logistics industry, used IoT technology to track the location and condition of goods and assets in transit. This positioned it for its next move: smart cities and automotive.
Its IoT customers in the automotive space that use BlackBerry’s QNX technology solution include BMW, Honda, Mercedes-Benz, Toyota, Volkswagen and Volvo, to name a few. This segment accounted for 37% of its revenue in its latest quarter.
Where as other telecoms companies like Vodafone in their IoT ambitions aim at providing a network for devices to connect to, BlackBerry aims at providing software and solutions.
“Both the IoT and Cyber businesses… address large and growing market opportunities. This new proposed structure will further increase both their operational agility and ability to focus on delivering exceptional solutions,” said BlackBerry CEO John Chen.
BlackBerry said in May it would consider strategic options for its portfolio of businesses that could include the possible separation of one or more of its businesses, including its legacy patents related to its defunct mobile devices.
US listed shares of the Canadian company rose more than 4% in trading following the news. The shares have fallen more than 18% since Reuters reported in August that private equity firm Veritas Capital had made an offer to buy the company. BlackBerry expects its IoT revenue to rise 9% to 17% in fiscal 2024, which ends next February.
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