The latest chapter in the BlackBerry saga may have been written and, as required in any good story, the twists keep on coming.
A leading protagonist – Thorsten Heins – is gone to be replaced by a new player – former Sybase CEO John Chen – and the plans BlackBerry had for a sell off and a move to go private have fallen through with $1bn in investor cash the best the market would provide.
The move was painted in a positive light by BlackBerry, but the market was less impressed, with the firm's share price falling as doubts about the long term future of the firm continue to linger.
However, the appointment of Chen, who previously worked his magic at software giant Sybase, to replace long-time BlackBerry staffer Heins could suggest the board at BlackBerry have finally recognised they should give up the hardware game.
Carolina Milanesi, research vice president at Gartner, told V3 that such a move would make sense: “The appointment of Chen as new CEO is a clear message that software and services are the future of the company not hardware," she said.
“Hardware might still be offered but it will not be the key asset of the company going forward.”
Milanesi said this could see BlackBerry push more into areas such as mobile device management (MDM) in order to help firms manage the bring your own device (BYOD) trend.
“That’s a market [MDM] that’s still going through changes. The leaders are changing all the time. Good Technology was first out the blocks but now the likes of Mobile Iron, Airwatch and Citrix are there so there is still a role that BlackBerry could play there."
She added that BlackBerry’s strong brand in the enterprise space would also serve it in good stead: “The company knows how to serve the enterprise market, and those qualities are appreciated by enterprises,” she added.
However, others such as Jan Dawson, telecoms analyst at Ovum, are skeptical that BlackBerry can compete in this market.
“Though it’s achieved some traction with enterprises upgrading their BlackBerry servers, it has failed to sell many BlackBerry 10 devices, and this looks unlikely to change,” he said.
“This ultimately harms the unique selling point of BlackBerry server products leaving the door open to replacement by rivals that are better able to support the more popular Apple and Android devices.”
Dawson also said the failure to take the company private would make any transitions in strategy harder to pull off.
“If Fairfax had taken the company private, it could have kept that strategy to itself,” he said. “But with BlackBerry remaining a public company, Chen and Fairfax Chairman and CEO Prem Watsa need to start communicating that new strategy very soon to inspire confidence in a turnaround.”
Milanesi agreed that going private would have been better for BlackBerry but she argued it could have saved the company by avoiding a complete buyout.
“It is much easier to go off behind the curtains and sort everything out but, as we saw [with the share price fall], the Street is not very forgiving. The silver lining, though, is they still have a chance to make something of the company now,” she said.
“I was skeptical that if Fairfax had taken it over it would have just been sold off into pieces to try and deliver shareholder value, but now they have another chance and to be honest it is a more concrete one than before.”
However, while a move away from hardware would seem sensible for BlackBerry, especially given the huge dominance of Apple and a slew of Android rivals, Chen has already come out and said he thinks there is a space for the firm in hardware, according to an interview with Reuters.
If true and the firm does insist on attempting to sell handsets that has so far led the company into the mire, then investors may end up wondering why on earth they stumped up $1bn to prop up the ailing firm. The next chapter in the BlackBerry story will no doubt have a few more twists.
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