BlackBerry’s days are numbered

The once-dominant smartphone maker is to assess its options following several years of decline.

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

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.

Recommended

How to profit from pampered pets beyond the pandemic
Share tips

How to profit from pampered pets beyond the pandemic

Covid-19 has greatly boosted ownership. But the market had been expanding for years, and demographic, cultural and medical trends all point to long-te…
30 Jul 2021
Share tips of the week – 30 July
Share tips

Share tips of the week – 30 July

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
30 Jul 2021
Robinhood is going public – should you invest?
US stockmarkets

Robinhood is going public – should you invest?

Online stockbroking app Robinhood is going public on the US stock exchange. Saloni Sardana looks at whether it's worth a punt.
29 Jul 2021
Three sustainable stocks that are doing well by doing good
Share tips

Three sustainable stocks that are doing well by doing good

Professional investor Peter Michaelis of the Liontrust Sustainable Investment Team picks three stocks to buy that are helping to create a cleaner, saf…
26 Jul 2021

Most Popular

Why the UK's 2.5% inflation is a big deal
Inflation

Why the UK's 2.5% inflation is a big deal

After years of inflation being a financial-assets problem, it is now an “ordinary things” problem too, says Merryn Somerset Webb. But central banks st…
16 Jul 2021
The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism
Economy

The MoneyWeek Podcast: Asia, financial repression and the nature of capitalism

Russell Napier talks to Merryn about financial repression – or "stealing money from old people slowly" – plus how Asian capitalism is taking over in t…
16 Jul 2021
Cryptocurrency roundup: Twitter founder’s “DeFi” platform
Bitcoin & crypto

Cryptocurrency roundup: Twitter founder’s “DeFi” platform

In crypto this week: regulators are getting worried; Jack Dorsey’s bitcoin DeFi platform; and dogecoin’s co-founder lambasts cryptocurrencies.  Salon…
16 Jul 2021