The end is nigh for BlackBerry. Once the market leader of the phone industry with a market capitalisation of over $80bn and loved by executives everywhere, it could now disappear from view in a deal worth just $4.7bn.
The deal, if all signed off, will mean that, like Dell in the PC market, BlackBerry will have time behind closed doors to get itself in order, work out what it can do with its assets, and see if there is a future for the company.
The announcement of the deal with Fairfax Financial Holdings came just a few days after the firm revealed huge losses of almost $1bn, and said it would be cutting 40 percent of its global workforce. This has helped Fairfax level a bid of $9 per share for the company.
To put that in perspective, BlackBerry's all-time high share price was $230.52 on June 20, 2007. A week later the iPhone was unveiled and everything changed.
BlackBerry’s woes since then have been well documented: the inability to compete with Apple, an unwillingness to reinvent their devices until it was too late and strange management decisions all caused the firm to decline in the face of huge competition.
What happens now, though, is unclear, and analysts remain unconvinced that the deal with Fairfax will save the firm if it goes through. Ben Wood, chief of research for CCS Insight, said tough decisions lie ahead of any new owners, even with the benefits of going private.
“Private ownership will provide breathing space as strategic options are assessed. Early indications suggest a focus on the business market. Wider structural changes such as spinning off BlackBerry Messenger (BBM) and retrenching from hardware will likely be carefully reviewed,” he said.
“Irrespective of this bid, questions around BlackBerry’s future remain unchanged. It seems unlikely it can continue as it is and while the most attractive option is to focus on business users, tough decisions will need to be made about which parts of the business to persevere with and which pieces to spin off or abandon.”
However, even by going private, some are unconvinced this will really save the company in the long run, as noted by Ovum's chief telecoms analyst Jan Dawson, who said the lack of clear long-term strategy has hampered BlackBerry for years.
"Normally, companies are taken private in order to give a long-term strategy time to pay off. But BlackBerry's key problem for the last couple of years has been the lack of such a long-term strategy. It simply hasn't articulated a way to rebuild its business as its device sales drop,” he said.
“Unless Fairfax plans to radically change or accelerate BlackBerry's strategy, it's unlikely to be able to turn the company around. And that means we're likely seeing the beginning of the end for one of the most iconic brands in mobile technology."
Dawson cited the firm's plummeting phone sales as evidence of the lack of interest in the firm’s products, while any attempts to use its brand to move into more device management markets could prove tough.
“Its mobile device management business is entirely based on its ability to manage BlackBerry devices, and its cross-platform management is much less well established than those of major competitors like MobileIron and AirWatch,” he added.
Back in BlackBerry's halcyon days, its strong focus on enterprise made it such a success. The term CrackBerry was used to describe the devices in the hands of busy executives, and the ability to access email on the go was a revolutionary experience.
Now we take this for granted and touchscreens dominate the market. However, there are still enterprises using the firm's devices and platforms. What does the deal mean for them?
Wood told V3 he thinks the news of the deal will be of relief to BlackBerry customers, as it brings some potential stability to the company, after 18 months of uncertainty.
“There has been uncertainty about where BlackBerry is going and the Fairfax deal is a clear statement of intent that it wants to focus the company on the enterprise businesses,” he said.
“The challenge will be making sure the strategy is articulated, and articulated quickly, so they can make it clear they have a plan and are taking the company in specific direction.”
For businesses that remain unconvinced, there is one company hoping to pounce: Microsoft. Its move for Nokia has helped cement its position as the third player in the mobile market and it will be keen to steal any business it can.
“Microsoft will relish the opportunity to take control of firms concerned by BlackBerry’s position. They can offer devices with the Nokia deal and with its ActiveSync platform it can offer management controls like the BlackBerry Enterprise Service (BES),” added Wood.
BlackBerry said in a statement that it would continue to provide services as normal. “It remains our top priority to continue serving all our customers and providing the same industry-leading quality products and services you have come to expect from BlackBerry," the firm said.
Whatever happens next, BlackBerry will always be remembered as the firm that brought email on the go to the masses, even if its reign at the top of the market was short-lived and is likely to end not with a bang, but with a whimper.
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