BlackBerry (TSX:BB)(NYSE:BB) has been making significant strides in trying to reinvent the wheel as a cybersecurity brand, away from it past life where it was a big player in the cellphone industry. That new strategy was on display in Las Vegas this week at the Consumer Electronics Show (CES), where it showed off its BlackBerry Secure branding and labeling, which helps companies communicate to customers that their products have a strong layer of privacy and security, backed by the BlackBerry name.
Given the scandals we’ve seen in the past year with data being compromised, sold, or misused, the demand for strong security tools is going to be paramount for users to trust a product. Facebook (NASDAQ:FB) is perhaps the best example of a company that has gotten it wrong, as it has continued to find its way into the news for all the wrong reasons; many people have decided to ditch the social networking site in light of its inability to adequately protect its users.
BlackBerry, however, is a brand that has continually been proven to be a trusted name around the world. Alex Thurber, general manager of Mobility Solutions at BlackBerry, told BNNBloomberg that it has won the trust of many governments: “It really is all the G7 governments that use BlackBerry technology, be it the older hardware phones or now the software-protected devices.”
Perhaps in response to the negativity surrounding Facebook, he went on to say, “We have never monetized users’ data. We have been very clear and up-front about that.” That’s a very strong statement that flies right in the face of companies that have done the contrary and been reckless in doing so. It’s an interesting strategy and one that could pay off, especially as companies look to distance themselves from Facebook and try to assure their customers that their products are safe and secure. And one way to do that: communicate that the devices are BlackBerry Secure.
Why this makes the stock a good buy I like what BlackBerry is doing by focusing on data privacy and protection. The whole branding effort relies on being associated with being a secure technology, and by winning over some big government contracts, it has clearly demonstrated that it has won the trust of some high-ranking officials. It’s just a matter of making sure that consumers and other companies are aware of its reputation for security.
While its sales numbers suggest that the company still has a long road ahead of itself, it is definitely making good progress, and gaining exposure at CES will only help raise awareness and attract more potential customers for the tech company.
In the past 12 months, BlackBerry stock has struggled, losing more than 40% of its value during that time. Although the stock has recovered from lows it hit in December, it’s still a far cry from the highs it reached in 2018 where its price hit over $18 a share. There’s clearly a lot of potential for the stock to rise as it continues to grow its cybersecurity business, and that makes it a very appealing buy today.
Fool contributor David Jagielski has no position in any of the stocks mentioned. David Gardner owns shares of Facebook. Tom Gardner owns shares of Facebook. The Motley Fool owns shares of BlackBerry and Facebook. BlackBerry is a recommendation of Stock Advisor Canada.