BlackBerry Sale Might Not Include Smartphones
Potential bidders for BlackBerry are only interested in parts of the business, concluding that the firm's smartphones, such as the recent Q10 and Z10, have little or no value, reports say.
Tue, September 17, 2013
Computerworld — Potential bidders for BlackBerry are only interested in parts of the business, concluding that the firm's smartphones, such as the recent Q10 and Z10, have little or no value, reports say.
Bidders from private equity firms are interested mostly in the BB 10 operating system that powers the new BlackBerry smartphones, along with selected patents related to keyboards, unnamed sources familiar with the potential sale told news agency Reuters.
BlackBerry on Aug. 12 formed a special committee to look into a possible sale of the company, "other transactions" and the creation of joint ventures and alliances.
BlackBerry declined comment on the Reuters report.
Fairfax Financial Holdings, which owns 10% of BlackBerry, did not respond when contacted by Computerworld. Reuters and others reported that Fairfax has approached several large Canadian investment funds about taking BlackBerry private. Fairfax is based in Toronto, near BlackBerry's Waterloo, Ont. headquarters.
The lack of interest in buying all of publicly-traded BlackBerry, valued at about $5.4 billion recently, primarily stems from the challenges facing the company in a very competitive smartphone environment. BlackBerry must compete against top selling Apple and Android-based devices as well as smartphones running Microsoft's Windows Phone, which recently passed BlackBerry to hold the third place ranking in smartphone market share, according to Gartner and IDG.
For all of 2013, Android is expected to grab a 75% share of the global smartphone market, versus 17% for Apple's iOS-based phones, 3.9% for Windows Phone and 2.7% for BlackBerry, IDC said.
Several technology analysts said they were somewhat surprised by the apparent lack of interest in all of BlackBerry, arguing that just five weeks after BlackBerry formed its special committee, it's too early to give up hope for a comprehensive sale.
BlackBerry's wireless email devices created the foundations for the smartphone revolution in 1999, seven years before the first iPhone launched in 2006. But BlackBerry's market share has fallen from $84 billion in 2008 to $5 billion today. In addition, sales of the new Q10 and Z10 haven't met expectations, analysts noted.
"I'm surprised there are not takers for BlackBerry," said Ezra Gottheil, an analyst at Technology Business Research.
"The patents and platform are worth quite a bit, but I also think the device business could be run at a profit," Gottheil said. "BlackBerry tried to follow Apple and then Android into the consumer space, but I think there is a place for a business device, one that is more secure, easier to use for email and has lower network costs."