BlackBerry buffs up security credentials with Secusmart deal

Tue Jul 29, 2014 3:13pm EDT
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By Euan Rocha

NEW YORK (Reuters) - BlackBerry Ltd (BBRY.O: Quote) (BB.TO: Quote) is buying a privately held German firm that specializes in voice and data encryption, it said on Tuesday, in a bid to burnish its credentials with highly security-conscious clients like government ‎agencies.

The Waterloo, Ontario-based smartphone maker did not disclose the terms of its deal to acquire Secusmart GmbH, which specializes in encryption and anti-eavesdropping services for governments, companies and telecommunications service providers.

The acquisition is the latest by the smartphone pioneer to build on niche areas in an attempt to reinvent itself under new Chief Executive John Chen and recover ground ceded to Apple Inc's (AAPL.O: Quote) iPhone and Samsung Electronics Co's (005930.KS: Quote) Galaxy devices.

"It is a really reassuring sign that BlackBerry is now less focused on firefighting and more focused on identifying and building for the long-term into enterprise services," said CCS Insight analyst Geoff Blaber.

Still, BlackBerry shares fell 4 percent to $9.54 on Nasdaq and C$10.45 on the Toronto Stock Exchange.

Chen wants to remain a competitor in the smartphone segment, but is focused on building on BlackBerry's strong mobile device management abilities by beefing up its security and corporate app offerings.

Secusmart's technology is being used to protect the devices of government officials in both Canada and Germany, including the BlackBerry device used by German Chancellor Angela Merkel in the wake of the U.S. spying scandal last year.

"Everybody wants to talk about eavesdropping, but it really isn't just that. Both governments and enterprises are now more and more focused on security in the mobile world," Chen said in an interview, adding that the Secusmart deal gives BlackBerry yet another leg up on the competition in relation to device security.   Continued...

Chief Executive Officer of BlackBerry Ltd John Chen holds up the unreleased Blackberry Passport device at their annual general meeting for shareholders in Waterloo in this file photo taken June 19, 2014.  BlackBerry is set to announce the acquisition of a German firm focused on voice and data encryption, burnishing its image in the eyes of  ultra security conscious clients like government agencies.  REUTERS/Mark Blinch/Files  (CANADA - Tags: BUSINESS TELECOMS)