Recently, Canadian smartphone manufacturer BlackBerry Limited BBRY struck a long-term patent cross-licensing deal with Cisco Systems, Inc. CSCO. However, the terms of the deal have not been disclosed.
Notably, BlackBerry owns a powerful patent portfolio comprising about 44,000 patents on data security and basic wireless technologies, worldwide. Thus, the new contract will not significantly boost the company’s licensing revenues apart from strengthening its business ties with Cisco.
Meanwhile, BlackBerry has been persistently facing declining smartphone sales owing to an underperforming operating system. In the recently concluded first quarter of fiscal 2016, the company sold 1.1 million smartphones as against 2.6 million in the last-year quarter. Moreover, Apple Inc.’s AAPL iPhone and Google Inc.’s GOOG Android software strong market demand has made matters worse for BlackBerry.
Thus, to mitigate escalating losses in its smartphone business, BlackBerry has been exploring several alternate business options to bounce back to profit, of late.
Meanwhile, BlackBerry’s BES12 platform is gaining increasing traction and the company’s latest deal with Sprint Corp. also testifies its growing popularity. As per the Sprint deal, BlackBerry will deliver secure management solutions to Sprint’s devices from other mobile platforms. BlackBerry also completed the acquisition of WatchDox, a data security company which delivers secure enterprise file-sync-and-share (EFSS) solutions on devices.
Mirroring such positives, BlackBerry reported a solid 150% year-over-year increase in Software and technology licensing revenues in the recently concluded first quarter of fiscal 2016.
Meanwhile, we believe that the company’s foray into alternative businesses will help it to make a turnaround in its finances pretty soon.
BlackBerry currently carries a Zacks Rank #3 (Hold).
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