Social Icons

Tuesday, August 13, 2013

Who Would Buy BlackBerry?

It's not often that a company announces that it can't hack it anymore. That's essentially the sentiment behind this extraordinary press release that BlackBerry issued Monday morning.
Despite the upbeat quote from CEO Thorsten Heins ("We continue to see compelling long-term opportunities for BlackBerry 10...") it's easy to conclude that BlackBerry is now throwing in the towel. BlackBerry may have 70 million or so customers, but momentum is no longer on its side. In 2010, the brand had a market share of around 40% in the U.S. Now the figure is below 10%. At its peak, BlackBerry (nee Research in Motion) had a market capitalization of more than $70 billion. Today, the figure is around $5.4 billion.

BBRY Market Cap ChartAll of which means that if it really wants to shake things up, BlackBerry has two options: Take itself private or be bought out. Neil Mawston, an analyst with Strategy Analytics, says both scenarios are equally likely. Mawston believes BlackBerry would be wise to go private. "Every quarter there will be public criticism and negative sentiment every quarter," Mawston says. "That's a vicious cycle that's very difficult to stop." As a private company, Mawston says, BlackBerry can spend a year or so getting its ducks in a row without the glare of the public spotlight.
A more intriguing possiblity is that BlackBerry finds a white knight like Google, which rescued Motorola in 2011. Google doesn't make a lot of sense as a suitor — the Motorola acquisition hasn't gone as smoothly as it would like — but some others do.
Mawston says that in particular, Chinese companies like Lenovo, Huawei or ZTE might be interested in leveraging their access to their native market to revive the brand. "If you were looking for a list, I'd put the Chinese guys at the top," he says.
Those aren't the only potential suitors. Others include Cisco and Microsoft.
With about $48 billion in cash, Cisco certainly can afford the $10 billion or so that BlackBerry would likely fetch. The affiliation would also address a weak spot in the company's portfolio of business services. Right now, Cisco's mobile offering is via a partnership with Nokia.
Microsoft, meanwhile, would make sense as a market share play, says Roger Entner, an analyst with Recon Analytics, says a Microsoft BlackBerry purchase would make sense only as a trojan horse for WIndows Phone. "Microsoft would basically cannibalize or kill BlackBerry," he says.

No comments:

Post a Comment


Sample text

Sample Text

Sample Text