BlackBerry Founder Says IPhone Users Will Embrace BBM App

BlackBerry founder Mike Lazaridis said he’s confident that users of iPhones and other devices will embrace the company’s BlackBerry Messenger platform, which will be offered on rival phones later this year.

“BBM is by far the most compelling wireless experience and wireless social-networking environment,” Lazaridis, who stepped down as co-chief executive officer in early 2012, said yesterday at the Bloomberg Canada Economic Summit in Toronto.

BlackBerry, based in Waterloo, Ontario, announced last week it will bring BBM to the iPhone and Google Inc.’s Android operating system in the next few months. The free service is currently used by 60 million BlackBerry customers, who rely on it to send more than 10 billion messages a day.

The move is seen as a gamble because BlackBerry (BBRY) will lose control over one of its most valuable services. It’s also not clear how the company will make money from the application. New BBM channels -- essentially chat rooms focused on specific themes -- may eventually create opportunities for advertisers to target users by sponsoring posts, the company said last week.

The decision by current CEO Thorsten Heins to turn the messaging service into a stand-alone application shows that the new BlackBerry 10 platform is thriving and can lure users without the exclusivity of BBM, Lazaridis said.

CEO’s Confidence

“He’s speaking to the confidence he has in the platform,” Lazaridis said. “Not only is BlackBerry back in a big way with BB10, he’s also showing he can expand that vision to other platforms.”

Shares of BlackBerry have more than doubled since September on optimism that a new lineup of BlackBerry 10 phones can help claw back market share lost to Apple and Android. Still, analysts have raised concerns about the company losing its ability to wring profit from its customers.

Alexander Peterc, an analyst at Exane BNP Paribas, cut his rating on BlackBerry to the equivalent of a sell yesterday, citing the threat to BlackBerry’s most lucrative source of revenue -- the service fees it charges customers. That business generated $964 million, or 36 percent of sales, last quarter. As competition mounts, Heins said in December that the company may get little or no service revenue from lower-end users in the future.

“Software and services are a vital profit pool for BlackBerry,” Peterc said in a report. “Threatening signs of disappearing legacy profit pools are already visible.”

BlackBerry shares fell 2.1 percent to $14.46 at the close in New York.

Earlier Jump

Asked if he would have done something differently in his last two years at the helm of BlackBerry, Lazaridis said he should have jumped much earlier to buy QNX Software Systems, the software maker BlackBerry acquired for $200 million in 2010 and used as the basis for the BlackBerry 10 platform.

“Earlier, that’s the key,” he said.

Since quitting the top job at BlackBerry and then leaving its board in March, Lazaridis has focused his attention on quantum-computing and nanotechnology, the science and technology of things approaching the size of an atom.

“After nearly 30 years at the helm, I think it’s time for me to start something new,” he said.

Backed by his $100 million donation, the Mike & Ophelia Lazaridis Quantum-Nano Centre opened in September in Waterloo. In March, he started a C$100 million ($97 million) fund called Quantum Valley Investments with Doug Fregin, an old friend and co-founder of BlackBerry, previously known as Research In Motion Ltd. (BB) The goal is to commercialize technologies from a cluster of research centers.

The fund has already invested in a couple of companies, Lazaridis said yesterday at the summit, declining to elaborate.

“We effectively missed the first quantum revolution, which was the silicon revolution,” he said, referring to Canada’s technology industry. “We just cannot afford to sit this one out.”

To contact the reporter on this story: Hugo Miller in Toronto at hugomiller@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net

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