BlackBerry diversifies itself with IoT and new cyber security practice

Struggling smartphone vendor BlackBerry is looking to diversify its business by launching a cyber security consulting service, focusing in part on the Internet of Things, and providing related tools to customers. The Ontario smartphone vendor, an early standard bearer for multifunction mobile phones, announced Wednesday it has acquired U.K. cyber security consulting firm Encription. The company did not disclose the terms of the deal, which was completed last week.

BlackBerry’s move into cyber security consulting isn’t a huge leap, as the company has long positioned itself as a security-minded smartphone vendor. Late last year, the company launched the Priv, a security- and privacy-focused smartphone running a modified version of Android. The company has significant cyber security expertise in house, and the new cyber security consulting practice will build on those assets, a spokeswoman said.

The company noted the global cyber security consulting industry generates US$16.5 billion in business a year, with huge growth predicted. BlackBerry posted a net loss of $89 million for its third quarter, which ended Nov. 28. Still, for the previous nine months ending on that date, it posted a net profit of $30 million, compared to a net loss of $332 million over the same period in 2014. BlackBerry’s cyber security services will focus on helping customers with security strategies and providing technical assistance, the company said. The company will specialize in automotive and Internet of Things security and in detection, testing and analysis.

The growing move into cyber security is a “smart move for Blackberry, especially as security is in the headlines” with a recent fight over smartphone encryption between Apple and the FBI, said Jeff Kagan, a mobile analyst. Still, it’s unclear if cyber security consulting will be a long-term winning strategy for the company, he said by email. “BlackBerry is having a tough time finding growth areas,” Kagan added. “Before we get too excited, we’ll just have to see whether this moves the needle at BlackBerry.”