What is BlackBerry Advanced Technology Development Labs?

BlackBerry (BlackBerry Stock Quote, Chart, News TSX:BB) has launched a new business unit that aims to keep the former phone maker at the forefront of R&D in the cyberspace field. Called BlackBerry Advanced Technology Development Labs, BlackBerry says that it’s building on its strengths with the move.

“BlackBerry has a long track record in cybersecurity, historically, in the initial wave of the mobile connected world,” said Charles Eagan, BlackBerry’s chief technology officer, in conversation with BNN Bloomberg on Monday.

“I think that what’s different now is that to accelerate our current innovation we have a dedicated team of 120 data scientists and machine learning experts and cybersecurity experts that are specifically focused on new innovation to help fuel that cybersecurity need,” Eagan said.

BlackBerry is likely hoping to raise spirits after the company reported a disappointing quarter last week which plunged the stock to lows not seen in half a decade. Although the company reported strong revenue from its IP licensing segment, it was its enterprise software and technology solutions business that fell five per cent in sales, down to $134 million, well below the consensus expectation of $150 million for the segment which includes the company’s cybersecurity business. (All figures in US dollars.)

“We achieved break-even non-GAAP earnings per share and generated free cash flow even with increased investments in sales and product development to support future growth,” said John Chen, Executive Chairman and CEO, in the quarterly press release. “We are encouraged by the positive reception on BlackBerry Intelligent Security, and we have a number of exciting new product launches in the next six months.”

Overall, BlackBerry’s revenue for its fiscal second quarter climbed by 22 per cent to $261 million but still fell short of analysts’ average estimate at $266 million, according to IBES data from Refinitiv. BB’s EPS was break even for the quarter.

The announcement of the new R&D lab is seen as an attempt by BlackBerry to squeeze more out of Cylance, the cybersecurity firm bought earlier this year for $1.4 billion and seen by some to be so far underperforming. Eagan says that BlackBerry Labs is all about following through on the company’s
strategic emphasis on security.

“An initial focus for us is to take that expertise from the Cylance acquisition and bring that laterally into other teams within BlackBerry. So, there’s a lot of potential and a lot of need for security in the future,” Eagan said.

“Initially we’re focused on machine learning for mobile communication and machine learning for automotive but really we’re a nimble team of engineers that can focus on anything that we feel is strategic for the company. So, it could be related to 5G or to autonomous vehicles or iOS and Android mobile devices,” he said.

Eagan says BlackBerry Labs is essentially aiming to “predict the future” by anticipating cyber attacks through AI monitoring of user activity to notice irregularities.

“A big part of what we’re doing is [determining] how do we create safe, partitioned networks and how do we actually do the impossible and predict future attacks before they actually happen?” he said.

“There’s a new thrust that we’re looking at which is continuous authentication. Usernames, passwords, firewalls, they can all be compromised. We want to look at the behaviour of the user and detect if you’re behaving differently and shut it down the instant that you detect that something abnormal is happening. This is where machine learning and some of our other security products are really important,” Eagan said.