BlackBerry announced on Thursday that the U.S. Defense Information System Agency, or DISA, has now given its Z10 and Q10 smartphones with BlackBerry Enterprise Service 10 the Authority to Operate (ATO) on DoD networks. Why this matters is that BlackBerry said that it is actually the first Mobile Device Management provider to obtain the ATO credentials.
DISA is now developing the infrastructure to support BlackBerry 10 smartphones. This sounds great on the surface, but there is a catch: how significant will this be financially? DISA is said to be “architecting the capacity to support 10,000 BlackBerry 10 smartphones by this fall and 30,000 by the end of 2013 on DoD networks.”
How much can 30,000 new phones generate in revenue? If the phones average $200, it is $6 million, plus whatever monthly fees it can collect. If the price is less, then it is even less important. BlackBerry shares have lost one-third of their value since they announced a 1 million unit order for new BlackBerry 10 phones earlier this year.
This should be a very solid bragging right for BlackBerry. After all, Android from Google Inc. (NASDAQ: GOOG) has been stated to have the highest vulnerability of any mobile operating system against hacks, intrusion, malware and more. Apple Inc. (NASDAQ: AAPL) also is no longer immune from attacks. BlackBerry has been known for years to offer the best security for smartphone communications at the enterprise level. Unfortunately, the number of apps and features on iOS and Android smartphones made the desire of the public turn away from BlackBerry at the same time that BlackBerry missed every key opportunity along the way.
Security perhaps must be the top priority for the DoD, considering how sensitive communications can be. The problem for Joe Public is that he prefers having access to cool things rather than the best security. Joe Public is just addicted to all the smartphones from Motorola, Samsung and others using Android, and to the Apple ecosphere with iOS, which allows integration of music and media almost seamlessly with music devices and tablets for the on-the-go person.
BlackBerry shares are up a mere six cents to $9.27, against a 52-week range of $6.22 to $18.32, an indication that this is just not enough of a big deal financially. BlackBerry investors today will have to hope that a catastrophic and damaging event occurs to millions and millions of Android and iOS customers that is severe enough that security becomes important again. Until that day, BlackBerry is fighting just to remain relevant.
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