BlackBerry, the ailing smartphone maker, is to be bought by a consortium of Canadian Investment companies for $4.7bn and taken private. The buyout is being spearheaded by Fairfax Financial, which already owns 10% of BlackBerry. BlackBerry announced last week that it was abandoning the consumer market after its latest handset flopped, writing off almost $1bn of unsold phone inventory and axeing 40% of its staff.
What the commentators said
BlackBerry brought the world convenient mobile access to email at the turn of the century, noted Rob Cox on Breakingviews. It proved so addictive that it became known as ‘crackberry’. BlackBerrys spread from Wall Street to the rest of the corporate world and eventually “spawned an aspirational market” among consumers. At its peak it accounted for half the smartphone market.
But in recent years “sleek phones” from Apple and Google’s Android have come to dominate the consumer market, while BlackBerry’s key business of selling devices to corporate customers “is also under attack”, said Economist.com’s Schumpeter blog. More firms are letting workers use their own smartphones in offices or factories.
One possible source of hope is the device-management business: the software that allows companies to monitor and control the smartphones in their corporate networks. But in this area, “the firm has been slower than competitors” to adapt to a world “in which companies are… grappling with a smorgasbord of smartphones, tablets and other devices” from a wide variety of suppliers.
In short, the company does not appear to have a long-term strategy to rebuild its business, said Jan Dawson of Ovum. So unless Fairfax can make some radical changes very quickly indeed, the odds are that we are seeing “the end for one of the most iconic brands in mobile technology”.
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