Did the Pentagon just save BlackBerry?

The device maker has been on the ropes for years, struggling against younger, hipper phones. The Department of Defense just threw the company a lifeline.

By The Fiscal Times Jan 22, 2014 3:37PM

Caption: Keyboard of a Blackberry smartphone
 
Credit: © South West Images Scotland / AlamyBy David Francis, The Fiscal Times


The story below originally reported that the Pentagon had announced it would purchase 80,000 new BlackBerry smartphones. That was incorrect and was based on a misreading of the Defense Department’s press release. The Fiscal Times regrets the error.


News reports this week that the Pentagon would purchase 80,000 BlackBerry (BBRY) smartphones – including one published by The Fiscal Times – helped send shares of the troubled mobile phone company soaring. The stock has fallen about 5 percent Friday after the Pentagon clarified that it had not placed any new orders for BlackBerry devices.


In a statement provided to The Verge, the Defense Department said:


"Absolutely no new orders have been placed for new BB devices. The DISA press release put out Jan. 16 never alluded to any devices being purchased. The 80,000 BBs and 1,800 non-BB devices referenced in the release are legacy systems already in DoD inventories."


What had seemed like a solid win for BlackBerry turns out to be just more of the same for a business that has been on the ropes and had a dismal 2013. Last year, BlackBerry lost $4.4 billion and saw its stock price fall 33 percent.


There is some good news, though: Last month, the company finalized a deal with FIH Mobile to create a handset, which will give BlackBerry the opportunity to move away from its reliance on phone sales.

Tags: BBRY
48Comments
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I had a BB for work for years and it was always a great tool. Simple, rugged and reliable.

Did everything I ever needed it to do.

Jan 22, 2014 6:01PM
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I had one for years and it does the job.  May not be as flashy as other phones but with thousands of BB in the Govt system, switching to a new phone would have been mega dollars.  I actually applaud the Feds for doing something to save some money!
Jan 22, 2014 5:10PM
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Well I phone made in China like so many others. Pretty much has to when it comes to buying gear if a war was to happen. China is making a lot of noise as of late.
Jan 22, 2014 4:31PM
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80k phones "save Blackberry" really - 80k phones. PLEASE.
Jan 22, 2014 5:47PM
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If your looking for a toy, don't buy blackberry.
Jan 22, 2014 7:28PM
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Blackberry is an awesome email management phone (not the Q10 though)  It is a work tool.  not a toy.  games and apps are not needed for work.  Being able to keep only relevant email on the phone and still have them stay in the email account for access from the lap top is a HUGE feature.  That and the tactile keyboard.  Again awesome WORK tool. 
Jan 22, 2014 7:20PM
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blackberries are more secure than droid or iphones
Jan 22, 2014 6:12PM
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Did you actually ****ing put "hipper phones" in the headline.
Jan 22, 2014 5:53PM
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For clarification, I think that the info I have seen said that the DoD would include 80k of the phones they already own into the pilot.
Jan 22, 2014 7:58PM
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The reason is because BB phones are harder to crack, they are much more secure.
If you want privacy don't buy an iPhone or an Android, government already has them on their 'side'.


Jan 22, 2014 5:57PM
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In other news, Pentagon officials are now looking to sell their BlackBerry stocks.
Jan 22, 2014 8:22PM
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Interim CEO John Chen has had a big hand in saving BlackBerry.  The stock has turned around considerably since he took over. BlackBerry is now a 4 part company:  a handset division, services division, BBM and the QNX.  This is only the beginning of BBRY's turnaround.  The fact that the gov't. puts its full trust in BlackBerry is the icing on the cake.
Jan 22, 2014 6:22PM
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It makes since, the government has had time to do all of their studies on the BB and know all of the holes in security. With a contract like this BB will be forced to fix them. Unfortunately they may find it may cost more than they will ever make to meet the requirements the US government probably put in the contract. 

Good luck to BB
Jan 23, 2014 8:09AM
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Glad the Military is good for something.
Jan 22, 2014 8:37PM
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I have a bb love it. It's a business phone with better security.  I wouldn't trade it for a  Iphone or android.
Jan 22, 2014 7:42PM
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With the prices the government pays for goods I would expect them to pay $10,000 a phone.....  so 80,000 phones should net BB $800,000,000, and with other fees I am sure they will round this up to an even 1 Billon.  
Jan 22, 2014 9:31PM
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There may be several reasons for the procurement from Rimm or BB in Canada..

I guess we/they could buy Apple's made in China...

But many comments point out Security, durability, and ease of use, plus Military already has them...


I really doubt any jobs will be eliminated here in America....May have some bearing on trade agreements also, involving NAFTA....

Do we want our neighbors to the North (Canada) buying $80 million dollar planes from an American company or maybe from the French or Chinese ???

Just sayin'.

Jan 22, 2014 8:32PM
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The reason the stock is up is not due to Pentagon purchase of phones.  It is up because of the plan to sell the real estate which is worth somewhere around $4 billion (that's $8 per share).
Jan 22, 2014 8:30PM
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How come our government props up Canadian companies like Black berry when companies that produce phones right here in America like Moto X are left out in the cold. Moto X is manufactured in Texas. Our priorities make no sense.
Jan 22, 2014 8:21PM
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Someone high in the company must have made a substantial donation to Obama's campaign(s).
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