U.S. Markets open in 4 hrs 23 mins

Why Apple's security pain may be BlackBerry's gain

Lawrence Lewitinn
Talking Numbers

The hacking scandal involving a slew of very private photos of some of the world’s biggest celebrities is creating a headache for Apple just as the company gears up for the potential release of a new iPhone and perhaps a wearable.

But what may be bad news for Apple may be good news for a long-forgotten rival—BlackBerry.

(Read: Apple says it is 'actively investigating' celeb photo hack)

Some investors say the beleaguered smartphone-maker, long left for dead by the most nonbusiness consumers, could see a boost as Apple’s trouble reinforces BlackBerry’s reputation as one of the most secure smartphone devices.

BlackBerry CEO John Chen himself also touted his company’s high security back in December in a post on CNBC.com, writing:

“[T]hose with the most stringent security needs … still depend solely on BlackBerry to secure their mobile infrastructure. For governments, BlackBerry cannot just be replaced—we are the only MDM provider to obtain ‘Authority to Operate’ on U.S. Department of Defense (DoD) networks. This means the DoD is allowed to use only BlackBerry. Across the globe, seven out of seven of the G7 governments are also BlackBerry customers.”

But despite a big base of government users, the company’s growth prospects may be dim. BlackBerry now has less than 1 percent of the smartphone market it once dominated, according to research firm IDC. Apple’s iOS is just under 15 percent while devices running Google’s Android have 80 percent of the market.

“BlackBerry is surviving on borrowed time,” said Gina Sanchez, founder of Chantico Global, who notes the company continues to have losses; in the last four reported quarters, BlackBerry had a net income loss of nearly $5.8 billion. “They are losing money. … So BlackBerry is a challenge still.”

(See: CNBC's Cybersecurity coverage)

Though Sanchez, a CNBC contributor believes many of the company’s assets are valuable—particularly BlackBerry Messenger, its enterprise software, and its mobile platform QNX – she believes the company has a long way to go. “Its turnaround has been very slow in coming,” Sanchez adds.

Craig Johnson, senior technical analyst at Piper Jaffray, is more optimistic than Sanchez on BlackBerry given the stock’s technicals. He sees a rounding bottom base pattern emerging in the stock. He believes that gives two very important messages to traders. “There is a trend change happening,” Johnson said. “More importantly, there’s a change in sentiment starting to happen toward the shares. Typically, when we’ve seen this happen in the past, it has been a pretty good indicator that something is changing and changing for the better.”

To see the full discussion on BlackBerry, with Sanchez on the fundamentals and Johnson on the technicals, watch the above video.