BlackBerry Move to Embrace Android May Bring Unexpected Reward

BlackBerry Ltd's move to embrace Android may be aimed at lifting revenue from its software and device management segment, but analysts say it may inadvertently give its device arm a fillip and a new lease on life.

"From the standpoint of marketing, this is a great way for BlackBerry to get visibility. It really doesn't hurt them much, and the upside is high," said Rob Enderle, who runs technology consulting firm Enderle Group.

Enderle and other financial and tech analysts agree that the move by BlackBerry does present its own set of challenges as the company would have to support two platforms and potentially put some resources into marketing an Android device, but with little to lose most agree it comes with little downside.

"If Android has one significant weakness it is security and that's just the thing that BlackBerry can fix, so it could play out pretty well and I am actually quite surprised that they did not try this sooner," said Enderle, adding that BlackBerry has to deliver a compelling device in order for the gambit to work.

Reuters reported on Thursday that BlackBerry was considering a move trial Android on its upcoming slider device, as part of a bid to convince potential corporate and government clients that its device management system, BES12, is truly able of manage and secure not just BlackBerry devices, but also devices powered by Google's Android, Apple's iOS and Microsoft's Windows operating system.

"In order for BES12 to succeed it has to be viewed by all as platform agnostic, and what better way to demonstrate that other than by doing it yourself," said Ramon Llamas, an analyst with technology research firm IDC.

BlackBerry, which once dominated the smartphone market, has seen its market share drop to under 1 percent, as the iPhone and a slew of Android devices from Samsung have captured market share. John Chen, a turnaround expert brought in to fix its slide, is now pivoting BlackBerry to focus more on its well-regarded software and device management business.

Although the hardware business is becoming less relevant to BlackBerry as it works through its turnaround, the company still needs revenues from hardware as it ramps up new revenue streams.

"It certainly makes sense for BlackBerry's hardware business to experiment with Android," said Morningstar analyst Brian Colello. "BlackBerry doesn't have much to lose. There's little downside and they just need one hit phone to justify the handset business."

© Thomson Reuters 2015