The beleaguered Canadian smartphone manufacturer,
), recently struck a three-year deal with mobile payment company,
EnStream LP, to deliver an advanced secure platform for monetary
transactions that take place between banks and customers.
EnStream will receive infrastructural support from BlackBerry which
will help these financial institutions (which includes Royal Bank
of Canada, Toronto-Dominion Bank, Canadian Imperial Bank of
Commerce) and carriers to save card details of customers on
smartphones which can use a near field communication (NFC) tag.
Notably, EnStream is jointly owned by three major Canadian
Rogers Communications Inc
Through a light tap between mobile devices and machines or credit
card payment systems, NFC tags allow smartphones to access valuable
information like credit card payment details.
Increased smartphone and tablet usage coupled with significant
deployment of 4GLTE services have encouraged people to make online
bill payments on their mobile handsets.
Gartner Research firm believes that mobile transactions will reach
$173 billion in 2017 from $35 billion in 2012, exhibiting a
compound annual growth rate of 31%. Thus, we believe that the
demand for BlackBerry's security platform will continue to rise
going forward. Moreover, it will create a lucrative opportunity for
Canadian handset makers who continue to lose smartphone market
In order to offset rising losses in its smartphone business,
BlackBerry has decided to enter the lucrative machine-to-machine
(M2M) wireless communications market. Management has undertaken
"Project Ion" to help business enterprises provide a seamless
connection between people, devices and machines for greater value
addition. Project Ion will also focus on developing a secure public
application platform based on the company's proprietary QNX
software and BlackBerry secure enterprise mobility management
Hence, we believe that such value-added services will not only add
new revenue streams for the company but will also minimize losses
while moving ahead.
BlackBerry currently has a Zacks Rank #3 (Hold).
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