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

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Central banks want politicians to take charge – but what will they do?
US Economy

Central banks want politicians to take charge – but what will they do?

The US Federal Reserve has come to the end of the road in terms of what it can do to accelerate any recovery, says John Stepek. It's over to the polit…
17 Sep 2020
IAG's share price is ready for take-off - here's how to play it
Trading

IAG's share price is ready for take-off - here's how to play it

The owner of British Airways has had a turbulent year, but is now worth a punt. Matthew Partridge explains the best way to play it.
8 Sep 2020