This week was BlackBerry’s General Stockholder Meeting and John Chen, the firm’s CEO, took us through how the company was doing. From a financial standpoint, while it did take a 16% revenue hit in revenue due to the pandemic, the firm was able to cut costs enough to show incredible growth (38%) in Earnings Per Share and decent growth (12%) in Earnings Before Income Taxes Depreciation and Amortization particularly in a Pandemic Fiscal Year. It is currently enjoying being well represented in the automotive market (195M cars running QNX), with IVY named a leader in both Automotive and Smart City segments by independent analysts, and their security solutions have penetrated 18 of the G20 countries (I’m guessing China and Russia are the two not using the solution).
The company’s stock has been volatile because, and this is not BlackBerry’s fault, it has become a meme stock like GameStop and bouncing between the mid-teens to the high $20s in share price, which is probably not making the investors happy, particularly the Hedge Funds which tend to lose out when this happens.
But there was an interesting question during the event on whether BlackBerry should return its name to Research In Motion, and I think the firm should consider that move.
I have a saying that when it comes to naming, “the only thing everyone agrees on is that the person that came up with the final name is an idiot.” But, in this case, Research In Motion was the original name for BlackBerry. Before Chen took over, a prior leader made the colossal mistake of naming the company after its primary product at the time. This move would be like Apple renaming itself iPod, which would have ended badly once Apple shifted to the iPhone.
A typical rule of thumb is you never name a company after a product, even if it’s the only product, because products have a life cycle, and companies are supposed to be immortal. Now, no longer really in the Smartphone business, but selling solutions for cars, cities, manufacturing plants, governments, and power stations, the name BlackBerry still reminds potential buyers of the failed phone lines. It doesn’t work at all to position the company well in the markets it is now attacking.
Now, I expect the renaming of Research In Motion as part of an even bigger mistake that this prior administration made to chase Apple. BlackBerry is another fruit, and, were you to create another Apple, this might be a logical way to start. But Apple wasn’t an ideal name for a Consumer Product company that had nothing to do with fruit. It was created when the company built the hoppiest computers and wanted a cheap name that no one could own. Even so, Apple Records was not amused, forcing them to promise to never go into music (which would have been a problem had not Apple Records exited the Music Industry).
In addition, many of the markets BlackBerry is attempting to penetrate once were heavy BlackBerry phone users and still recall the pain of having to switch to something less secure when BlackBerry largely exited the market. This memory creates the impression you can’t trust BlackBerry to sustain a market, making it seem riskier to trust the company. If the firm exited a product that the firm was named after, how likely will it exit a product and market not tied to its name?
I still get comments when referring to BlackBerry that implies many potential buyers think BlackBerry went under years ago because the phones are gone. A surprisingly large number of top executives that had to abandon their secure BlackBerry phones for something else are still pissed about that, and the name must remind them that they were abandoned before.
As a result, I think the name is a far more significant impediment to sales than the firm realizes, while Research In Motion doesn’t have the negative stigma of BlackBerry closer to what BlackBerry does today than the name BlackBerry is without the phones. Another viable option would be to rename the company Cylance, the less known (than BlackBerry) security company BlackBerry acquired. Cylance could also better encompass what the firm does without the BlackBerry baggage.
BlackBerry is doing well, likely because the demand for advanced AI solutions to malware increases dramatically, as is the need for a secure platform for intelligent implementations. But one of the significant impediments is the firm’s history of abandoning its earlier primary offering and leaving many people in the lurch as a result. The BlackBerry name reminds people of their abandonment and causes them to recall the company as it was, not as it is. To change that problem would require a massive image marketing program, which BlackBerry seems unwilling to fund, or an extended time measured in decades so that people forget what the firm used to do and only associate its current offerings with the brand. Even so, being named after the fruit hasn’t helped Apple with enterprise accounts and certainly isn’t doing wonders for BlackBerry either. Even with Apple’s massive marketing budget, their one truly enterprise product, the Apple Server, failed catastrophically in the market.
As a result, for BlackBerry to reach its full potential, the promise of which was showcased in these decent financial results, it may need to go back to being named Research In Motion, its last name, ironically, to get away from its past. Or use Cylance with the same result.