BlackBerry Soars 10% On Pentagon Order, Shares Now Up 34% In 2014
BlackBerry has an almost uncanny ability to not die when it's been written off again and again. Today, the Pentagon has announced that it will install 80,000 BlackBerry handsets on its network by the end of January.
Context & Ripple Effects
John Chen has been rebuilding BlackBerry's story around enterprise services since announcing his strategy on December 30, 2013 — including plans to grow QNX adoption beyond handsets — after US consumer share slid in Q4 2013 per NPD amid Apple and Samsung gains, and after the April 2013 rally built on his prediction that the Q10 would sell tens of millions.
The Pentagon's confirmed plan to install 80,000 BlackBerry handsets on its network by end of January is the first large-scale validation of that enterprise pitch: a government anchor account at exactly the moment the company is doubling back to hardware keyboards (and suing Typo over its keyboard attachment) to defend its signature franchise. The story travelled widely, with Bloomberg, Reuters, ZDNet, Business Insider and Fox Business all picking it up.
First-order effects
- BlackBerry gains an 80,000-unit government deployment closing this month — revenue and a marquee security credential for the enterprise-services strategy Chen laid out in late December.
- Investors reprice the 'written-off' narrative: the stock jumps 10% on the announcement, taking 2014 gains to 34%.
Second-order effects
- Other security-sensitive institutional buyers — federal agencies and regulated enterprises weighing migration to Apple or Samsung fleets — now have a high-profile reason to defer or slow those migrations, protecting BlackBerry's device and BES install base.
- Rivals' enterprise mobility vendors lose their strongest sales argument ('even the Pentagon is leaving'), forcing them to compete on cost and management features rather than inevitability.
Third-order effects
- If government procurement continues treating BlackBerry as critical communications infrastructure, institutional lock-in funds the pivot to enterprise services and QNX while consumer share erodes — a survival model built on sovereign-grade dependencies rather than mass-market volume.
- It sets up a recurring pattern where single large orders move the stock sharply, making BlackBerry's valuation hostage to headline contract news until recurring service revenue matures.
The trend: Government and enterprise lock-in is becoming the financial lifeline that lets declining smartphone vendors fund their pivot to software and services.