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Several potential buyers could swoop on the ailing smartphone maker

BlackBerry may be up for sale: CEO has hinted the company could be open to offers. Nothing much has changed at BlackBerry HQ since the last time we wrote about the Canadian company’s difficulties – it’s still in decent financial shape and has new products to try to win back some credibility, if not actual glory – but relentless pressure from the market may be encouraging the board to consider exit strategies while there is still good value in the firm.

If BlackBerry does go up for sale, the eventual buyer will cause ripples throughout the industry.

A new owner will raise questions of the future path for enterprise services, at a time when IT departments are wrestling with mobile , device management, and BYOD.


In January, the operating system debuted, along with the first smartphone in the revamped BlackBerry stable – the touchscreen Z10. That was rapidly followed by the Q10, sporting the traditional BlackBerry keyboard layout, and more recently the lower-spec Q5 arrived, aimed at the cost-conscious segment in which BlackBerry is still strong, particularly in emerging markets like South Africa.

We’ve also had the comprehensive overhaul of BlackBerry Enterprise Server, the messaging platform for corporate environments.

But in the half-year since the arrival of BB10, BlackBerry has struggled for traction. The new phone models are selling, but competitors are selling more. A lot more.

’s forward projection for smartphone market share showed Android growing, slowing, nibbling out a niche and BlackBerry shrinking. The confirmed Q2 numbers show that the trends were correct, but underestimated: Android has grown faster than expected, slowed more sharply, growing a little slower than expected, and BlackBerry shrinking beyond expectations. BlackBerry’s share has dropped nearly 50% since Q2 last year, from 5.2% to 2.7%. Heins hoped to hit the ground running, but it looks like the company may have slipped coming out of the blocks. Lay-offs in the R&D department, following a separate big redundancy last year, haven’t helped reassure the market of the company’s prospects either.

Although the company is selling plenty of phones, the tiny market share makes it a tough sell to app developers, and in the smartphone world, if you haven’t got the apps, you haven’t got a future.


BlackBerry as a company has much more in its portfolio than just the phones. The intellectual property, comprising 5 000 active patents and almost as many applications, primarily in the mobile space, is a valuable commodity, for a start. Many acquisitions are driven heavily by IP, like Google’s purchase of Motorola for $13 billion. Nortel’s patents were sold for $4.5 billion, when the former telecom giant went to the wall, to a consortium including Apple, … and BlackBerry.

The enterprise messaging platform still has traction, and the mobile device management space is becoming very focused on , where BlackBerry still enjoys a strong reputation. The global network behind BlackBerry services also has great potential in the right hands. And the firm also has about $3 billion in cash, which raises its value.

Altogether, analysts peg the selling price of the company at about $10 billion. That’s really not a lot, in context – plenty of possible suitors could put that sort of money on the table, in cash or shares. But that assumes the company would be sold intact. A very real possibility is that it could be broken up, like Nortel, and sold off in pieces. That could fetch a higher aggregate price, which might appease shareholders.

Given the spread of assets and options, potential buyers are a mixed group of large fi rms with broad interests, focused players who would want specific parts. There are a lot of possibilities – we’ll just look at some of the key players and most likely candidates.


Several device manufacturers would be contenders. Samsung and Apple continue to dominate the handset market, and it is entirely possible that a smaller rival might look to use BlackBerry to boost its share. That is a risky strategy, especially when the incoming technology is on the way down, but BlackBerry has enough key technologies, like its framework and messaging platform, for a buyer to see value in the deal.

Lenovo, for example, has already suggested it would be willing to put an offer on the table. Lenovo wants to improve its position in the mobile space and has failed to achieve much traction against the Apple/Samsung juggernaut. ZTE is also a possibility – another manufacturer struggling to establish its products outside its home territory, though the strategic fit is questionable.

But Lenovo and ZTE share a common problem: they are Chinese. The online animosity between Western powers and China are reaching Cold War levels, and the acquisition of a key telecoms player – one with an incumbent presence in government departments and corporate boardrooms, access to messaging data and email flowing over its servers, and technology – by a Chinese entity is almost unthinkable. If the Canadian government didn’t move to quash that possibility, the US government would apply every possible ounce of pressure on its northern neighbour to ensure no deal progressed beyond speculation.


Acquisitions of US firms are subject to approval by the Committee on Foreign Investment in the US (CFIUS), a regulatory body which has repeatedly nixed high-tech deals, particularly those with implications. And not just the Chinese: Israeli firm Check Point tried to buy SourceFire (an intrusion detection company) in 2005 – no dice. has seen several US deals blocked, and its board has openly stated that the company has effectively given up on trying to acquire US firms. BlackBerry, being Canadian, is not subject to CFIUS, but the Canadian government has similar oversight, and pays close attention to the demands of the US.

Which also means, of course, that is not an option for BlackBerry either and that is a deal with great strategic possibilities. not only manufactures devices (and would like to fare better against Samsung on the world stage), but telecoms transmission equipment.

BlackBerry Services, fully integrated into the telecom kit, have great potential – has telecom customers all around the world, especially in emerging markets where BlackBerry still enjoys robust market share. There are excellent prospects for a /BlackBerry tie-up, but there is absolutely no chance such a deal would meet with regulatory approval.

has even been accused of providing the Chinese government with access to telecom data. It denies those claims, but of all the impossible Chinese suitors for BlackBerry, is the least likely of them all.

might be able to get away with it, being Taiwanese. Like , it would stand to gain from BlackBerry’s reputation, technology and market presence. manufactures high-quality products but has struggled to achieve results against Samsung’s saturation marketing.

$10 billion would be a big bite for , though, and it is questionable whether it could turn the fading fortunes of a Canadian manufacturer into strategic value.


While Chinese firms face stiff opposition to any acquisition, Koreans are on far more amicable terms – the nation is an ally of the West, and any regulatory concern would be more likely to centre around market dominance than political differences.

Two obvious contenders present themselves: LG and Samsung. LG is as bad a strategic fit as – the company needs a boost in mobile, but buying a dying brand is not the way to achieve it.

Samsung clearly needs no help in the smartphone market. The company is streets ahead of its rivals, with 31.7% share of Q2 sales. The nearest rival, Apple, managed only 14.2%, and third place was LG with 5.1%. In fact, Samsung outsells the rest of the top five combined, so BlackBerry’s addition to the pie would barely register. But it’s not all roses for Samsung – it wants to break into the messaging space to strengthen ties with network operators, but its own platform ChatOn has not yet delivered the numbers despite being preinstalled on all Samsung devices.

Fold ChatOn into BBM and suddenly the Korean giant would have a messaging footprint comparable to its handset dominance. And the biggest gap in Samsung’s portfolio is device management and . The firm is building out its products – SAFE and KNOX – to shore up its offering, but BlackBerry’s existing, and well-established, portfolio would fit in very nicely, strengthening Samsung’s enterprise position against . The addition of BlackBerry’s patent portfolio would also be hugely welcome – Samsung and Apple are engaged in a bitter patent feud, with the Koreans on the back foot. A Samsung acquisition would be hitching the BlackBerry wagon to a dragster.


Of the other manufacturers, is another option, but that’s not really an option at all. has problems of its own – its dramatic fall from grace has mirrored BlackBerry’s – but it’s tied itself to ’s coat-tails and there’s no chance of that changing, not with ex- exec " rel=tag>Stephen Elop heading the Finnish manufacturer. Anyway, is taking tentative steps back to viability – Windows Phone is slowly carving out a niche and is dominating it. Adding BlackBerry to its baggage would only weigh down.

Ironically, while is too tied to to consider an acquisition, itself could be interested. has a strong existing interest in enterprise messaging, and adding BlackBerry’s suite to the mix would make it even more powerful, at a time when the enterprise server market is increasingly more important to the firm’s income as the PC market declines.

On the hardware side of things, Dell is an unlikely candidate. Although mobile is an important part of the firm’s strategy, it’s far more focused on management, not handsets, with emphasis on the data centre. Laptops and tablets have not been the core of Dell’s strategy for years: phones would be entirely off book.

HP is more likely, but the company burned its fingers with Palm, then did it all over again with webOS. It would take an astounding degree of chutzpah to convince the shareholders to bet $10 billion on yet another failing mobile OS. If it does happen, it’s unlikely to end well.


All these candidates are existing players, but there’s a market segment with plenty of cash and a propensity for surprise acquisitions: the web giants. If any of the traditional manufacturers were to buy BlackBerry, the results would probably be a predictable merging of device lines, rebranding of services and possibly some patent litigation, but probably no curve-balls. But what if a nouveau-riche Web darling were to make an offer?

, after all, just stumped up a quarter of a billion for a newspaper. Is it possible that Amazon might eye BlackBerry? The company is, after all, in the mobile device market now with the Kindle range. Actually, no, it’s not likely at all. Amazon might have a hugely diversified market presence but its product strategy is laser-focused, and BlackBerry wouldn’t fit in.

Google is more likely, for all the wrong reasons. If expresses interest, Google probably will too. Not that actually wants BlackBerry – the search giant is still digesting its $12 billion 2012 acquisition of Motorola, and doesn’t really need any part of BlackBerry – it is enjoying near-saturation in mobile, both through the growing dominance of Android and the pervasive reach of its search, video, and mapping apps. Page would probably bid just to get the price up, though, just as he did to annoy the telecom incumbents when US spectrum went to the auction block in 2008.

Yahoo! is more likely: Marissa Miller knows she needs to take dramatic steps to restore the company to the lustre of its early Internet days. The company has a messaging presence, and plenty of business content, so it’s not inconceivable. But there is much discontent among Yahoo! staff, with reports of infighting and projects left to languish – it is hard to see BlackBerry thriving in such an atmosphere.

The company is also desperate to dominate mobile – it knows that users are increasingly mobile but its ad revenue is not, and it’s on a campaign to address that (with signs of success, too). But its eforts to promote “Facebook Home”, a launcher which basically replaces a smartphone’s interface with a Facebook skin, met poor reception and was widely panned, but the company has not given up. Buying BlackBerry would give it a complete environment under its control – there’s probably nothing Zuckerberg wants more.

At the same time, it would give the company a big boost in enterprise credibility and a strong messaging platform to strengthen its position against rivals, notable Google. Chances are the portfolio would remain largely unchanged for the foreseeable future – no sense scaring off the few enterprise users who remain – but BlackBerry OS 11 might Whether it could reverse the downward momentum of the actual product line is questionable.

Or the company could be taken apart. Private equity could step in, buy up the firm and then break it up for parts, selling the components for a combined profi t.

That would be the end of BlackBerry as we know it, but it might be the best financial result for shareholders.

This is all speculation, but for BlackBerry’s enterprise users, the company going up for sale could have deep implications. Any acquirer will hasten to reassure customers that existing products will continue to be supported, of course, but some will be nervous regardless. Some, conversely, may be excited about the prospects of the one-time smartphone leader’s future, under the umbrella of a Samsung, or, yes, even Facebook.