It seems we may be nearing the end of a long and tortuous death march by Canadian smartphone maker BlackBerry. After attempting to beat Apple and its own game, then talking about doing a Dell and going private, BlackBerry is now putting out the “For Sale” sign.
Underlining its latest move, BlackBerry’s biggest investor resigned from the company’s board. However, with a market share hovering near 0 percent, will the smartphone maker attract a buyer?…
In a Monday statement, the Waterloo, Canada-based company announced it has formed a special committee to investigate its options. Those options include an outright sale, a joint venture, partnership, or something completely different.
“Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives,” BlackBerry board member Timothy Dattels said in a statement reported by Reuters.
Translated, the statement indicates BlackBerry knows it can’t compete with either Apple or Android and wants to put itself on the auction block while its BBM technology is still worth something.
It is interesting that Dattels is heading the exploratory committee. A senior partner in the private equity firm (read: private buyout experts) TPG Capital and a former top executive at RBC Capital Markets, Dattels caused a bit of a flurry among investors when he joined the board in 2012.
The worry – that Dattels might sell BlackBerry – seemed just a bit too early.
Too late was BlackBerry’s Z10, which attempts to compete with the iPad but without much success. The other problem was BlackBerry was caught flat-footed by Apple and Android, turning a lead in smartphone mindshare into a continual drain of customers. In response to shrinking revenue, BlackBerry has slashed its costs, performing a rather public lobotomy on its organization.
Will a buy-out of some sort help BlackBerry?
The company’s shares rose 9.4 percent in early trading, Reuters reported Monday. However, analysts don’t expect talk of a new owner to help BlackBerry’s long-term prospects.
Take BMO analyst Tim Long told
While a change in structure could result in a higher stock price in the near term, we do not envision any changes that would help BlackBerry reverse the significant smartphone share loss or rapid decline in service revenues.
What might help is if BlackBerry found a winner.
A potential advantage might be its BlackBerry 10 software. BlackBerry CEO Thorsten Heins has mentioned BlackBerry 10 as the bright spot in the company’s portfolio.
We are seeing BlackBerry shift more towards a software and services provider. The company has recently announced plans to offer its BlackBerry Messaging service as an app for iOS and Android. Secure Work Space for iOS and Android was also unveiled.
Let’s face it: BlackBerry just doesn’t get touch screens – the present and future of smartphones. But as Google has found, hardware is only half of a successful handset. This isn’t the first time a manufacturer has cut its hardware ties to focus on software and services.
We’ve seen it with IBM and other PC makers battered by the plummeting market for hardware. BlackBerry still can produce innovative smartphone software, and that – not its out-of-step hardware – will be what the company offers a new buyer.