It is nearly impossible to please BlackBerry BBRY bears. In March Mark Hibben excoriated the company, noting how “Almost everything in the Android or iOS device worlds outclasses BlackBerry’s best.” The company responded by introducing the BlackBerry Priv, a premium phone that runs on Android. The Priv has access to Google/Alphabet GOOG ,GOOGL apps and is receiving carrier support – that alone gives it a leg up over other BlackBerry phones. However, Seeking Alpha author KIA was unimpressed by what he described as the Priv’s weaker security:

In an effort to garner much needed market share, BlackBerry has moved away from its own security-focused operating system and instead decided to tap into the install base of the most popular smartphone operating system on the planet – Android.

The problem with this move by BlackBerry is that much of BlackBerry’s core customers are governments and enterprises where security is everything. And while Android is known for a lot of things, “security” isn’t one of them.

The Situation

I have been a loyal BlackBerry customer for over a decade. I became attracted to the stock due to its revenue diversification, and the fact that management’s new focus on consumer tastes would spur smartphone sales. However, neither thesis has played out.

With SAF fees in runoff, BlackBerry’s revenue for FQ2 2016 was down 47% from the year earlier period. Hardware sales have been a bigger disappointment. Neither the BlackBerry Classic or Passport, which were launched in the second half of 2014, have jumpstarted handset sales. In November of last year I thought BlackBerry had a chance to sell 8 to 9 million smartphones to meet its previous $2.5 billion FY16 revenue bogey.

After the company reported handset revenue of $464 million on 1.9 million unit sales in the first half of FY 2016, my unbridled optimism turned into a pipe dream.

It all begs the question, “If consumers do not value the security features of BlackBerry handsets, does security really matter?”