The IT Nerd

I don’t get it.

The BlackBerry Priv was the company’s first attempt to release a non BB10 smartphone. Nobody knows how well it did or didn’t do as BlackBerry doesn’t release those numbers. But it’s safe to say it didn’t exactly set the world on fire. Thus I find it strange that I am reading in VentureBeat that they’re going to the well again with three new phones. Named after elements, you’re going to get the Neon, Argon, and Mercury. Each with their own unique specs and aimed at different market segments. Expect to see these phones start to ship in a month or so.

The question is, what’s the likelihood that these phones will do as well as the Priv. Which is not all that well?

I think it’s safe to say now that John Chen isn’t exactly turning around BlackBerry. I say that because Q1 earnings are out and they are not good. You can read all the news here [Warning: PDF], but here’s the highlights… or low lights.

• BlackBerry served up a net loss of $670 million. This time last year, they made $68 million. That’s not good.
• Revenue for the quarter were $424 million, down from $658 million a year ago.
• BlackBerry has $2.5 billion in the bank.

Here’s were things get interesting. BlackBerry on a conference call that I tuned into is doubling down on making smartphones. This despite that section of their business apparently losing $21 million. They seem to think that new handsets coming in Q3 will help them turn that around and they pointed out that they sold 500,000 smartphones in Q1. For me that all falls into “good luck with that” country as they really have no marketshare (less that 1% at present) and mindshare at the moment.

Now John Chen says that the above combined with the fact that it now has a total of over 3,300 enterprise customers and that 74 percent of Q1 software revenue is reoccurring, and the fact that they have other stuff that people want (like QNX or BlackBerry Radar), that this will drive them to profitability for the full year. I remain skeptical, but I suppose anything is possible.

BlackBerry may have a bit of a PR problem on their hands in the form of a CBC News report that says that a specialized group of people in BlackBerry actively handed over user data to police agencies around the world as a matter of course:

CBC News has gained a rare glimpse inside the struggling smartphone maker’s Public Safety Operations team, which at one point numbered 15 people, and has long kept its handling of warrants and police requests for taps on user information confidential. 
 
A number of insiders, none of whom were authorized to speak, say that behind the scenes the company has been actively assisting police in a wide range of high profile investigations

But unlike many other technology companies, which regularly publish transparency reports, it is not clear how many requests BlackBerry receives each year, nor the number of requests it has fulfilled.  

Insiders say, for example, that BlackBerry intercepted messages to aid investigators probing the political scandals in Brazil that are dogging suspended President Dilma Rousseff. The company also helped authenticate BBM messages in Major League Baseball’s drug investigation that saw New York Yankees star Alex Rodriguez suspended in 2014.

This goes way beyond what they were doing with the RCMP which came to light a few months ago. Here’s why it’s a problem for BlackBerry:

One document obtained by CBC News reveals how the Waterloo, Ont.-based company handles requests for information and co-operates with foreign law enforcement and government agencies, in stark contrast with many other tech companies.

“We were helping law enforcement kick ass,” said one of a number of sources who told CBC News that the company is swamped by requests that come directly from police in dozens of countries.

“Narco trafficking, human trafficking, money laundering, kidnapping, crime against children, knowing you are stopping those things … how do you not love doing something like that?” said the insider.

Now I am not naive enough to believe that any data that gets shuffled around the Internet is private. Nor am I naive enough to expect privacy of any sort. But if you’re a company that could hand this data over to a third party, tell me that you do it. That’s all I ask. Apple for example has transparency reports that illustrate how often people ask them for user data. By seeing those reports, I can make an informed decision as to if I want to use your product or not. Plus it mitigates or avoids the possibility that the data that they hand over could be misused in some way. Oh, and just because BlackBerry can help law enforcement agencies “kick ass” doesn’t mean that they should. I have to admit that this really does not pass the smell test and it really casts BlackBerry as a company in a negative light.

BlackBerry is heating things up this month by offering amazing deals on the BlackBerry Passport, Passport Silver Edition and PRIV by BlackBerry – you don’t want to miss it.

From Thursday, May 5 through Thursday, May 26 the BlackBerry Passport will be available for the best price ever onShopBlackBerry:

• BlackBerry Passport now only $489
• BlackBerry Passport Silver Edition now only $550

Plus, with all purchases of PRIV you’ll receive a complimentary black flip case and sync pod, for a total value of $119.

The complete details on these promotions can be found via Inside BlackBerry.

Given the news last week about the RCMP having access to BBM messages since 2010 and BlackBerry pretty much admitting that they let them have access to said messages, it made me wonder how secure BBM really is. It appears at first glance that it isn’t as secure as BlackBerry would want you to believe.

The weaknesses of BBM are best explained in this article from Encrypted Mobile where they say this:

The Achilles’ heel of BBM is that while PIN-to-PIN messages are encrypted using Triple DES, RIM adds a global cryptographic “key”, which is shared between every BlackBerry device manufactured. This automatically allows a situation (in theory, at least) where, if the messages can be intercepted at the cellular service provider’s network and the hacker party manages to spoof the intended recipient’s PIN, any BlackBerry device can be used to decrypt all PIN-to-PIN messages sent by any other BlackBerry device.While this has never happened as yet, or at least has not been brought to our attention, the scenario lies entirely within the realm of possibility.

The same key, used by all BlackBerry devices to be able to decrypt PIN-to-PIN messages, can be used by RIM at their relay station to decrypt any user’s messages. Again, this is not to suggest that RIM is in the business of reading their users’ content. However, if legally put to the task, RIM can provide decrypted PIN-to-PIN messages in clear-text to law enforcement authorities.

In short, this explains how the RCMP was able (and is likely still able) to access BBM Messages if they are going over the BlackBerry Internet Service. The article also confirms that if you use BlackBerry Enterprise Server, this is a non-issue. Though yours truly is a bit skeptical at that given the times we live in. In any case, this weakness is not trivial and should give those who use BBM a reason to wonder how private those private messages are.

The last few days were likely not kind to BlackBerry CEO John Chen after reports of the RCMP having unfettered access to encrypted BlackBerry messages for years surfaced. He’s now posted a blog post which can be found here. Now, I encourage you to read it for yourself. But several things are clear to me after reading this:

1. BlackBerry did let the RCMP have access to this data. Why? BlackBerry co-operates with law enforcement as long as their request is lawful.
2. If you are a consumer, which means that you use the BlackBerry Internet Service, your data is safe…. As long as you’re not a bad guy. In which case BlackBerry will hand it over upon request to law enforcement.
3. If you use BlackBerry Enterprise server, you have nothing to worry about because they allegedly can’t get to your data. Oh, if you’re a bad guy, this also means that you might want to take the hint and move over to BES to keep BlackBerry from handing over your data to the cops.

Thus I really think that this will do nothing to put an end to this firestorm. In fact, it will likely keep the fire going for some time. Why? People will compare this response to Apple’s response to the FBI, which was if you recall was to not help them, and make their purchasing decisions based on that. In that scenario, BlackBerry comes out the big loser. Guaranteed.

A while ago, I published a story about a report that the BlackBerry platform was not as secure as they make it out to be because cops could get access to encrypted data on the device. That was refuted by BlackBerry and the issue went away.

The issue is back and it appears that these reports may have been right all along. Court documents obtained by Vice Canada and Motherboard Canada relating to a 2011 Montreal gang murder case reveal the RCMP has intercepted and decrypted more than one million BBM messages in connection to a set of investigations called Project Clemenza. The documents claim that the RCMP has a server that is capable using the “appropriate decryption key” to intercept and decrypt messages sent between consumer BlackBerry devices. Note that I said consumer devices. If you have a BlackBerry on a BlackBerry Enterprise Server, the RCMP doesn’t have access to your messages.

Maybe. These days anything is possible.

In any case the documents also imply that this access was given to them by BlackBerry. Now this is completely plausible as a BlackBerry blog post from last year criticized Apple for its unwillingness to cooperate with law enforcement agencies. But it also really puts a dent into their security street cred as one has to wonder who else they might be working with.

Expect this story to gather steam.

UPDATE: One other thing to consider is the fact that the RCMP may still have this key and can in theory snoop on any consumer BlackBerry user at any time. That is something that BlackBerry needs to speak to immediately.

If you’re a fan of the BlackBerry 10 OS (otherwise known as BB10) on your Z30 or Z10, then you should not read this story. I say that because John Chen who is CEO of BlackBerry had this to say to The National which is based in the UAE:

Mr Chen said that while BlackBerry would continue to release updates for BB10, there were no plans to launch new devices running the operating system.

That basically means that BB10 is for all intents a OS on borrowed time. It also makes the fact that Facebook and Whatapp have both abandoned the BB10 platform kind of a minor distraction. So, what’s he going to release instead. How about Android powered BlackBerries? Though, they’ll have to do a better job of selling them:

BlackBerry last week announced it had sold just 600,000 handsets during the three months to the end of March, well below analyst forecasts of 850,000. Mr Chen declined to say how many Privs had been sold during the period.

Mr Chen admitted that the Priv “was too high-end a product”, with its target market of enterprise customers put off by the handset’s US$700 price tag.

“The fact that we came out with a high end phone [as our first Android device] was probably not as wise as it should have been,” Mr Chen said during a visit to Abu Dhabi.

“A lot of enterprise customers have said to us, ‘I want to buy your phone but $700 is a little too steep for me. I’m more interested in a $400 device’.”

Mr Chen insisted that BlackBerry’s secure Android handset proposition was one that appealed particularly to enterprise consumers.

“We’re the only people who really secure Android, taking the security features of BlackBerry that everyone knows us for and make it more reachable for the market.”

Of course if that doesn’t work, he may just leave the hardware business entirely leaving BlackBerry as a software company. All of this sounds like BlackBerry is trying to reinvent itself to survive. We’ll see how well that works.

Blackberry is really mad at Facebook and WhatsApp as both companies have decided to stop supporting the platform. The company has posted a blog post that hides very little:

We are extremely disappointed in their decision as we know so many users love these apps. We fought back to work with WhatsApp and Facebook to change their minds, but at this time, their decision stands (but let them know how you feel on social media, using the hashtag #ILoveBB10Apps). Despite this, we have worked hard to ensure our end users have the best experience in light of this decision, and are continuing to search for alternate solutions.

Good luck with that. Clearly Facebook and WhatsApp which is owned by Facebook feels that there’s no point in making an app for the BlackBerry platform. BlackBerry users disagree as there is a online petition, which is currently closing in on 2,000 signatures. Which in the grand scheme of things is not a lot. Thus, while this might be entertaining to watch, nothing is likely to change.

BlackBerry fans, I have some terrible news for you. BlackBerry senior director Damian Tay has a word with India’s Economic Times and he had something to say that might cause you to break out into tears:

“The PRIV device is essentially our transition to Android ecosystem. As we secure Android, over a period of time, we would not have two platforms, and may have only Android as a platform [for smartphones],” Damian Tay, senior director, APAC product management at BlackBerry, told ET. “But for now, we have BB10 and Android platforms for our smartphones.”

In other words, BB10’s days may be numbered. Now he’s not the first to say this as his boss John Chen has dropped hints along this line for some time now. But dumping BB10 is a risk as it could really tick off die-hard fans, governments, banks, and other places where BlackBerry products are still used. But on the other hand, they may have nothing to lose as BlackBerry only makes up less than 1% of the global smartphone market. Thus they may feel that now is the time to make a bold move in hopes of hitting a home run.

Good luck with that.