BlackBerry beefs up security credentials with Secusmart acquisition

BlackBerry completed an acquisition of German encryption specialist Secusmart, as the Canadian smartphone company continues to play to its remaining core strength in providing secure communications to businesses and governments.

Executive chairman and CEO John Chen said the acquisition will boost BlackBerry's standing as a provider of encrypted mobile communications for enterprise. While terms of the deal weren't disclosed, the acquisition buys BlackBerry access to Secusmart's encryption and anti-eavesdropping technologies, and access to customers including Germany's government.

"The acquisition of Secusmart underscores BlackBerry's long-standing commitment to being the best in enterprise mobile security," Chen commented, adding: "BlackBerry is the only vendor to offer secure and encrypted voice, text and messaging, setting us further apart from others in the industry."

Chen noted the acquisition comes at a time "when cyber security breaches and data theft pose ever-growing costs and threats to governments, companies and consumers."

Secusmart MD Hans-Christoph Quelle said that the two companies have worked together since 2009, and that the acquisition will enable his company to explore "significant opportunities to accelerate innovation for high-end secure communications solutions."

BlackBerry first made its move for Secusmart in July. However, the latter's government contracts meant the deal was closely scrutinised by German authorities. Sources told the Wall Street Journal that BlackBerry was required to disclose details of its source code to Germany's Federal Office for Information Security, and also commit to a no-spying policy in Germany.

Scrutiny of the deal was almost inevitable after it emerged that U.S. and UK spy agencies had hacked into a mobile phone being used by German Chancellor Angela Merkel. The WSJ noted the Chancellor has since revealed the device in question had been supplied by her political party and was separate from her Secusmart device.

Chen is playing up BlackBerry's secure communications service as part of a drive to return the company to profitability. In November, he said profits are more important than simply releasing mass numbers of devices to compete with smartphone market leaders including Samsung and Apple. Last week the company released its Classic smartphone--a device that restores the company's trade mark qwerty keyboard.

The company took a step in the right direction in its fiscal third quarter--the three months to end-November--when it revealed a net loss of $148 million (€120 million) compared to $4.4 billion in the comparable period in 2013. However, total revenue dipped 33.5 per cent year-on-year to $793 million. BlackBerry's EMEA revenue fell from $549 million to $366 million year-on-year.

For more:
- read BlackBerry's Secusmart announcement
- view this Wall Street Journal article
- see BlackBerry's earnings announcement [PDF]

Related Articles:
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Leading German telcos face NSA, GCHQ spy probe
BlackBerry's Chen: Security concerns would likely scuttle a deal with a Chinese company
European leaders discuss home-grown comms network to prevent U.S. spying
BlackBerry's Chen: The focus is more on profitability than new smartphones

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