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BlackBerry Is Knocking on the Door of a $19 Billion Opportunity

BBRY-Road“What I’m going to tell you is a story about luck — and extraordinary luck at key moments along the way.” – Jim Balsillie, former BlackBerry co-CEO

It’s no secret that success in business has a lot to do with luck. Putting yourself in certain positions through hard work might make such good fortune more “likely,” but very rarely do businesses achieve what BlackBerry (TSX: BB)(NYSE: BBRY) achieved without a few strokes from the brush of luck. So, what Jim Balsillie had to say about BlackBerry becoming, at one point, an $80 billion company might not be all that profound.

In this case, the luck he is referring to happens to be in the rearview mirror and seemingly evaporated right along with around $75 billion of market capitalization. However, in my mind, losing the smartphone battle that has cost it so dearly might just be the “luckiest” bit of it all.

After all, who wants to settle for a market that should be worth $150 billion in sales this year when you can pivot towards one that could create $19 trillion in value before the ball drops in 2021?

Now, BlackBerry certainly didn’t consciously make the decision to hemorrhage smartphone market share. It was effectively made for it by market forces outside of its control; customers simply chose iOS or Android over BlackBerry.

Enter, stage left: failed buyout attempts… management upheavals…change…

Rather than sulk, however, BlackBerry has continued to try and build smartphone market share in developing nations. At the same time, CEO John Chen has been working on a company-wide reorg and a behind-the-scenes strategy that was announced this May… Project Ion.

What exactly IS Project Ion? It’s BlackBerry’s attempt to carve out a portion of the “Internet of Things” for itself.

By now, you’ve probably heard of the so called, Internet of Things (IoT). This new craze that foresees your Roomba communicating with your house’s central air to tell it, “It’s awfully dusty around here. Perhaps it’s time for a filter replacement…”

The Road Ahead

I hear you wondering how BlackBerry fits into all of this. Well, it plans on being a first responder to the quickly approaching collision between data and fragmentation.

If the IoT has its way, the number of water droplets residing in clouds right now could pale in comparison to the amount of data in the virtual cloud. BlackBerry is even throwing around terms like “exabytes” when executives discuss the upcoming data deluge. What’s an exabyte? It resides in between a petabyte and a zettabyte… or 1 billion gigabytes… or the hard drive capacity of 300,000 brand new iMacs. And, BlackBerry is talking about them being generated on a daily basis.

For BlackBerry, it believes that reliably and securely storing this data in the cloud is its future torch to bear. Right now, data storage for the IoT is rather fragmented, rendering it nearly impossible to draw conclusions from a broad swath of collected data points. If BlackBerry has its way, however, this cloud will be a data aggregator, allowing companies and individuals to “distill it into meaningful, actionable information using open source and third-party analytic tools.”

One of the key industries the company plans to target with this new initiative is the healthcare sector – an industry heavily reliant on data safety. Why? Well, a Gartner study believes that $285 billion of value will be created in the healthcare sector by 2020 at the hands of the IoT.

Already, BlackBerry has begun pivoting in this direction with the investment it made in NantHealth this past April. The combination of BlackBerry and NantHealth hopes to facilitate communication between medical equipment, data centers and mobile devices used by doctors. Rather than just a pipedream, though, the two have already laid out plans to have a healthcare-oriented smartphone on the market by late 2014-early 2015.


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