BlackBerry plans to expand cross-platform offerings, may license features like its software keyboard and BlackBerry Hub to other device makers
Ina Fried / Re/code :
Context & Ripple Effects
In March 2015 BlackBerry is still a handset company, but the licensing plan for its software keyboard and BlackBerry Hub is an early signal of the pivot that defines everything that follows in this coverage arc. Within months, sources report BlackBerry considering Android for an upcoming smartphone as it moves focus to software and device management.
The logic lands fully by September 2016, when BlackBerry announces it will stop in-house development of phones entirely and outsource design, manufacturing, and selling to partners after a $372M quarterly loss. Licensing the keyboard and Hub to other device makers was effectively a rehearsal: extracting value from BlackBerry's software assets without needing BlackBerry hardware to carry them.
First-order effects
- Device makers other than BlackBerry gain access to two of its signature differentiators — the keyboard software and the BlackBerry Hub messaging aggregation layer — turning internal R&D into a potential licensing revenue line.
- BlackBerry's own handsets lose their exclusivity claim on those features, weakening the remaining product argument for buying a BlackBerry-branded phone over any rival that licenses the same software.
Second-order effects
- Once the software is licensable, the economics of running a proprietary handset operation deteriorate further — a path the coverage shows ending in the decision to outsource all device work to partners.
- Rival device makers can now differentiate on productivity and secure-messaging features without building them in-house, shifting competitive pressure toward whoever aggregates communications best rather than whoever owns the factory.
Third-order effects
- If the pattern holds, BlackBerry's durable assets are its embedded-software franchises rather than consumer hardware: the same logic behind the BBM Enterprise SDK for Android and iOS apps and the $75M bet on QNX for autonomous vehicle testing.
- For the broader industry, the move points toward handset value migrating from integrated hardware-software bundles to component-level licensing, where former vertically integrated players survive by selling their software layers to the platforms that displaced them.
The trend: Struggling handset makers are converting their proprietary software assets into cross-platform licensed components, decoupling brand value from their own declining hardware businesses.