It is no secret that BlackBerry has been struggling for years. The official announcement that the company is exploring strategic partnerships and even a sale, is a clear sign that a major shakeup is imminent. For those still loyal to BlackBerry, is it time to move on?
In a statement released earlier this week, BlackBerry announced that
…the Company’s Board of Directors has formed a Special Committee to explore strategic alternatives to enhance value and increase scale in order to accelerate BlackBerry 10 deployment. These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions.
To most industry experts, this news was long in coming. BlackBerry, which had been a pioneer in the global mobile/cellular industry in the mid- to late-2000s, and was the device of choice for enterprise and the personal consumer, has been floundering badly over the past five or so years.
In addition to considerable delays in releasing new products and upgrades to its platform, when they were finally realised, they frequently failed to live up to expectations. More importantly, the company appeared to not fully appreciate the changing market dynamics – the need for manufacturers to push the innovation envelope, to iterate more frequently, and to successfully navigate the cutthroat competition that had emerged. In summary, ‘the BlackBerry’, which once was the most coveted brand, is now lagging behind Samsung, Apple, Microsoft, in terms of sales, device features and capabilities, and general public perception.
Early impact of the announcement
Much is being made about the future of the BlackBerry. Even we here at ICT Pulse have been discussing the matter over the past two years. (See BlackBerry: are we witnessing the end of an era? and Can BlackBerry hold on to its market share in the Caribbean?). Currently speculation is rife about possible buyers: from a now former BlackBerry board member, Prem Watsa, Chairman of Fairfax Financial, who resigned following the announcement, to tech companies such as Lenovo, IBM, HTC and Microsoft. Samsung has also been proposed, since it is has been developing it own Operating System that would be “more than a simple alternative to Android” (Source: Apple Insider), and access to the BlackBerry technology could strengthen its final product.
However, there is a concern that BlackBerry’s announcement this week, while inevitable, is an admission that the company is in dire straits, which could affect the value of the company, and also hurt its chances of getting attractive offers from which to choose.
What might be some of BlackBerry’s options?
Having said this, a big issue that industry insiders have been grappling with is whether BlackBerry, as a standalone wireless manufacturer, can be turned around successfully. Clearly, the company’s strategies to date have not been working, and it could be argued that it has already lost too much ground to compete directly with the current market leaders. Further, it is currently unclear the extent to which BlackBerry might be amenable to having a much more targeted business model, instead of still trying to compete in the mass consumer market. However, below are some possible investment scenarios that could play out.
First, investment firms, such as Fairfax Financial, might be interested in BlackBerry. Although such companies could offer much welcomed funds, if the BlackBerry’s position of exploring ‘strategic options’ is to be believed, the money alone might not be enough, unless it is prepared to realign to business to focus on specific niche markets.
Alternatively, if a relationship is established with a tech company with a well-known brand that is not already in the smartphone business, the resulting strategy could geared be towards enhancing that tech company’s offerings in the market segments it serves. However, the BlackBerry brand as we know it, could almost certainly transition into obsolescence.
Finally, although much has been made over the years about some of the technology that has been developed by BlackBerry, such as its corporate email software, BlackBerry Enterprise Server, interested parties might be more interested in the patents that the company currently holds, rather than trying to revitalise its phone/tablet offerings. This was decidedly the case when Google purchased Motorola in 2011, and so far, Google does not appear to be implementing any major strategy to improve Motorola’s position in the market.
So where to go from here?
From almost every possible angle, the future of the BlackBerry is uncertain, and it may even cease to exist in the not too distant future. For those diehard and still enthusiastic BlackBerry owners, it might be prudent to begin to explore alternatives, and how to transition from a much-loved device to something else… just in case…