Is Snowden’s Latest Revelation a BlackBerry Killer?


BlackBerry (NASDAQ:BBRY) has long touted the security of its mobile devices, and at one time the devices were the mobile device of choice companies and government institutions where security was top priority. Even when sales of its iconic smartphone were abysmal, that feature was the company’s life raft. But the political cyclone that was created by leaks from former National Security Agency contractor Edward Snowden has drawn BlackBerry into its vortex.

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On Monday, the British newspaper The Guardian reported that documents in its possession showed that British intelligence services spied on foreign politicians at two G20 political summits in 2009, intercepting phone calls and emails from their BlackBerrys . “New converged events capabilities against BlackBerry provided advance copies of G20 briefings to ministers…Diplomatic targets from all nations have an MO of using smartphones. Exploited this use at the G20 meetings last year,” read one document acquired by the publication.

But BlackBerry remains “100 percent confident in the superiority of BlackBerry mobile security,” the company said after the report.

Thus far, BlackBerry has not been drawn into the news cycle involving the leaks of classified information by Snowden regarding the alleged effort by the United States and Britain to collected data on telephone calls and Internet exchanges. It was not on the leaked list of companies the U.S. government officials indicated had cooperated in the effort, as Microsoft (NASDAQ:MSFT) and Facebook (NASDAQ:FB) were. However, according to The Guardian’s report, fresh documents leaked by the former NSA contractor said that British intelligence agency GCHQ was able to “penetrate the security of BlackBerry smartphones” to access advance copies of briefings for government ministers and other important documents.

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There was no evidence that BlackBerry was complicit in the breach, but the company’s reputation for super security among corporate clients and governments will likely be dented. One of the company’s Network Operating Centers, a key conduit for global BlackBerry traffic, is in the United Kingdom, a fact that could make owners of the company’s handsets even more concerned about the security of their data.

BlackBerry’s devices are considered to be more secure than other smartphones because they sends emails through a proprietary network of servers, a feature that many analysts have highlighted in their assessment of the handsets. Elaborating on that system, the smartphone manufacturer has said that it is impossible for it to access clients’ data because only the corporate and government customers have the encryption keys.

“Our public statements and principles have long underscored that there is no ‘back door’ to secure BlackBerry Enterprise Solutions,” a RIM spokesman said in a statement seen by The Wall Street Journal.

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