Struggling smartphone maker BlackBerry said that it was exploring its “strategic alternatives”, including a potential sale of the company. The decision, which had long been expected by investors, follows almost three years of steadily worsening news from the once-dominant tech firm, as it loses market share to rival platforms. Shares rose 10.5% after the announcement, but remain down 80% over the last three years.
What the commentators said
“The message is clear: BlackBerry is probably finished as a standalone company,” said the FT’s Lex column. The question is whether it should have taken so long to admit this. “The company’s flagging prospects are nothing new, so shareholders are right to wonder if BlackBerry would have been better off putting up the for-sale sign months ago.” But the latest market share statistics suggest not.
While BlackBerry’s new models have made little impression, the data “show there is space for a third mobile operating system after Apple’s iOS and Google’s Android”: Microsoft’s Windows Phone has doubled sales. BlackBerry had a chance of retaining that niche. It may have failed “but taking its best shot was the correct choice”.
The fact that a sizeable part of the market is still up for grabs suggests that a deep-pocketed rival might still fancy buying up BlackBerry and trying to turn it around, said Robert Cyran on Breakingviews. But this is fraught with risks: “Hewlett-Packard had the same idea with Palm in 2010 – and wound up writing down about three-quarters of the $1.2bn it spent”. Nor is the company a promising candidate for a leveraged buy-out; while it currently has a strong balance sheet ($3bn in cash and zero debt) and is still generating cash, it’s hard to be confident that will continue as market share and margins worsen.
So who might buy BlackBerry? Despite the albatross of the handset business, the firm has valuable assets, such as a patent portfolio worth up to $1.5bn, according to broker Jefferies, and the large user base of services, such as BlackBerry Messenger. That suggests the most value may come from breaking the firm up and selling it to trade buyers, suggested Andrew Orlowski on technology news site TheRegister.co.uk.
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