BlackBerry reverses IoT divestment, names John Giamatteo as new CEO

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BlackBerry Ltd. has recently made a pivotal change in its operational strategy, opting to retain its internet-of-things (IoT) division rather than proceeding with the previously intended spinoff. The company plans to reorganize, keeping the IoT division integrated with its cybersecurity operations. This strategic move is aimed at ensuring independent operation and financial stability for both sectors. Following this announcement, BlackBerry’s stock experienced a 3.6% decline in premarket trading in New York.

Additionally, BlackBerry has announced the appointment of John Giamatteo as its CEO. Giamatteo, who has been leading the company’s cybersecurity division since 2021, is recognized for his vast experience in the tech industry, including his tenure as president and chief revenue officer at McAfee Corp. BlackBerry is currently in the midst of selecting a consultancy to guide its restructuring process.

This strategic shift is part of BlackBerry’s ongoing transformation from a smartphone manufacturer to a software-centric company. The firm had announced in 2016 its move away from smartphone hardware production, ultimately exiting the smartphone market by 2020 to focus exclusively on software development. Despite facing challenges in revenue growth, BlackBerry has been actively exploring new directions, as evidenced by reports in August of a potential acquisition by Veritas Capital.

The decision to integrate the IoT division internally represents a significant deviation from BlackBerry’s initial plans. Analysts, such as John Butler from Bloomberg Intelligence, have speculated that this could lead to a slower growth trajectory, particularly in light of potential decreases in lucrative licensing revenues after patent sales.

Sources Include: Bloomberg 

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