BlackBerry Ltd (BBRY) May Lose President Obama [UPDATED]

BlackBerry Ltd (BBRY) May Lose President Obama [UPDATED]
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BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) takes pride in securing U.S. President Barack Obama’s mobile communications. Devices made by the Canadian company meet the high-security needs of the government agencies. Sources close to the matter told Will Connors of The Wall Street Journal that the White House is currently conducting security tests for smartphones from Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) and LG Electronics Inc. (KRX:066570) (OTCMKTS:LGEAF) for internal use. This has threatened the most high profile stronghold of the ailing Canadian company.

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The smartphones are tested by the White House Communications Agency and the White House’s internal technology team. Sources said that the testing is in early stages, and any implementation of new smartphone is months away. There is no indication that President Obama is switching away from his BlackBerry anytime soon. A Defense Department spokesman confirmed that it is testing a variety of mobile devices.

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President Obama has said previously that he uses an iPad for reading. But sources said that the iPhone isn’t a part of testing. Apple Inc. (NASDAQ:AAPL) has increasingly been eating into BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s share in the government sector. Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) has also been investing heavily to win more government customers.

BlackBerry to open a security innovation center in Washington D.C.

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB)’s proprietary network has long been considered the most secure technology among smartphone vendors. But Android-based smartphone makers have boosted security in recent years by working with third-party software firms. BlackBerry has already been a loser in the consumer market as its market share in the U.S. has fallen close to zero. The shift of government users to other platforms is a big negative for the company.

To maintain its dominant position in the government sector, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) CEO John Chen has made the government sector customers his top priority. The company plans to open a “security innovation center” in Washington D.C. as part of that effort.

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) shares rose 0.80% to $9.49 at 11:53 AM EDT.

UPDATE on 3/21 at 6:15PM EST: Blackberry has emailed ValueWalk the following:

BlackBerry Statement:

“We value the long-term relationship we’ve had with the White House and have been securing their mobile communications for more than a decade.  The U.S. government requires the highest levels of security.  We were the first mobility platform to receive the ‘Authority to Operate’ certification from the Department of Defense.

Governments test new technologies frequently, but nevertheless the U.S. government continues to choose BlackBerry for its unmatched security and cost effectiveness. Other vendors such as Samsung and LG still have a long way to go to catch up to meet the government’s stringent requirements and certifications. BlackBerry’s operating system has already received the highest security approvals from the United States, Great Britain and NATO, and our latest operating system, BlackBerry 10, is already certified for high-security users in various NATO countries.”

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