BlackBerry and Cisco ink long term deal

After reporting a Q1 loss, Waterloo, Ont.-based smartphone vendor BlackBerry Ltd. struck a long term deal with networking powerhouse Cisco Systems Inc.

Cisco and BlackBerry have signed a patent cross-licensing agreement that covers most of the two company’s technology portfolio.

In a statement, Cisco’s Dan Lang said cross-licensing is an effective way for technology companies to assure freedom of operation and help remove concerns about patent litigation. The agreement recognizes Cisco’s patent portfolio, one that is regularly rated among the strongest in the telecommunications and networking industry.

Lang is the vice-president of intellectual property at the San Jose, Calif.-based Cisco. He added that the company looks forward to continuing to innovate to meet the needs of respective customers with BlackBerry.

Buoyed by stronger than expected software sales in Q1, BlackBerry gets part of the cross-licensing agreement with Cisco. BlackBerry confirmed it will receive a license fee from Cisco.

Dr. Mark Kokes, vice president of intellectual property and licensing at BlackBerry said the agreement with Cisco underscores the value companies place on BlackBerry’s broad and foundational patent portfolio. They too echoed Cisco’s view saying the two companies can focus on innovation and continued technical cooperation, allowing Cisco and BlackBerry more freedom to create leading products and services for customers without the potential for patent disputes.

As for those software sales figures from BlackBerry, the company reported software and technology licensing revenue of $137 million, which equates to a 150 per cent growth.

BlackBerry still has positive cash flow of $123 million in the quarter and a cash and investment balance of more than $3 billion. The company said it anticipates positive free cash flow to target sustainable non-GAAP profitability some time in fiscal 2016.

BlackBerry was able to finalize an acquisition in the quarter. WatchDox is a secure enterprise file sync-and-share vendor and will be integrated into BlackBerry’s BES12 Enterprise Mobility Management solution.

Besides the Cisco partnership, BlackBerry continued its arrangement with Foxconn and well as other joint development deals with Wistron Corp. and Compal Electronics. The company said these partnerships will help BlackBerry’s device business return to profitability by reducing the time to market of new devices, streamline the supply chain, leverage greater economies of scale and enable resource and fixed asset reductions for greater business efficiency.

CEO John Chen said, in a statement, that software and technology is key to BlackBerry’s future growth. “Our financials reflect increased investments to sales and customer support for our software business. In addition, we are taking steps to make the handset business profitable. We believe these actions are prudent and necessary to grow the business and we believe the remaining milestones in our strategic plan are achievable.”

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