BlackBerry Ltd. said Wednesday it agreed to buy closely held
software provider AtHoc, the smartphone maker's latest niche
acquisition in its bid to reignite revenue from sales of mobile
software and security offerings to government and corporate
customers.
The deal is the Canadian smartphone maker's fourth acquisition
since September. All either focus on helping companies reduce their
employee mobile device costs or add additional security to mobile
networks.
Financial terms of the AtHoc purchase weren't disclosed.
AtHoc's software works across mobile operating systems and
allows users to communicate in real time during a crisis situation.
The San Manteo, California-based company's customers include the
U.S. Department of Defense and Homeland Security.
"AtHoc's technology and expertise will play a key role as
BlackBerry works to connect and secure a broad range of endpoints,"
BlackBerry Chief Executive John Chen said in a release.
BlackBerry is betting on the sales of mobile security and
productivity software, and smartphones aimed at professionals, to
fuel its turnaround. It is targeting software sales of $500 million
for fiscal 2016.
Acquisitions have always been part of BlackBerry's strategy. But
deals are becoming increasingly important to its efforts as sales
of the company's latest software used to manage mobile devices on a
corporate network struggle to gain traction.
BlackBerry generated a profit of $68 million in its fiscal first
quarter, largely due to cost-cutting. Revenue fell 32%. The
company's software sales rose year-over-year, but some analysts
were disappointed with the increase because it also included
revenue from the licensing of technology patents. BlackBerry had
previously not grouped technology licensing revenue with software
sales.
The company had also aimed to generate another $100 million in
fiscal 2016 from its BBM messaging service. But in another sign of
its struggles, the company disclosed in a regulatory filing last
month that it no longer expects to reach that BBM revenue target
this year fiscal year due to lower-than-expected growth. It didn't
provide updated BBM revenue guidance.
BlackBerry signaled in its release that AtHoc's technology could
help it generate revenue from BBM. The company may incorporate the
software with its BBM service to allow users to enable live video
feeds or transmit messages in real time.
Write to Ben Dummett at ben.dummett@wsj.com
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