The Value In Blackberry?

It appears that, of the 3 main options outlined in the latest strategic review for Blackberry, a sale of the company is the most likely. While we shouldn’t rule out some lame attempt at a joint venture or partnership, a sale is the more likely outcome. It sounds like shareholders basically want out, and want as much as they can get for what’s left. Some of the sale options are obvious, but there are a couple that I think are more interesting, as unlikely as they might be.

Why Not Partner or JV?

Let’s get this over with: Blackberry has zero value as any kind of strategic or joint venture partner. Why? Because they’ve got nothing to bring that isn’t better obtained by just buying the company. Their brand is damaged beyond repair. They have no real industrial design skill. They have no special talent in marketing (except perhaps as a bad example of it, or as a cautionary tale).

Their main strengths are something that another company would want to own outright, and not have to compete with in some way. So who could be the buyers?

The Obvious Choices

Two obvious potential buyers are big Android manufacturers, specifically Samsung and HTC. Both could use Blackberry’s skills and technology with enterprise integration and security. Either would benefit from these assets, and it would give them better weapons to go after the enterprise market. Samsung has made some progress in Android security, but it still trails both iOS and Blackberry. HTC has relied on whatever Android provides now, which isn’t all that strong.

Samsung has made some inroads in enterprise, but adding Blackberry’s skill and technology to the mix gives them a stronger story. Of course, this doesn’t do much for Android as a whole, since I suspect that Samsung wouldn’t be contributing any of the additional features back to the core Android base. I would also expect Samsung to incorporate these same features into Tizen, as a way to boost that operating system’s potential viability. Buying Blackberry is good for Samsung. It has minimal benefit to Android as a whole in Samsung’s hands.

HTC would also benefit from buying Blackberry. HTC hasn’t done nearly as well as Samsung, and could use some way to boost their sales and their presence. An HTC Android device with strong enterprise integration and top-level mobile security would make them attractive to the enterprise crowd. Again, like with Samsung, I don’t see HTC contributing any of this back to the Android base, instead keeping it for themselves as a competitive advantage.

Some Unlikely Buyers

Four of the biggest players in the enterprise market are also the least likely to look at Blackberry. IBM and Oracle have stayed largely out of the mobile device market itself, and instead focused on providing all the infrastructure to support them. Dell has gone in and out of the mobile device space with tablets and PDA’s, but trying for a full-on phone, particularly when the company is experiencing upheaval while its status as a public company is up grabs, may not be good timing.

HP is an interesting possibility, but given current events, is an unlikely suitor. HP has a history with mobile technology, and one that goes back decades, depending on your perspective. Pocket calculators were, in some ways, the first “mobile computers”, and HP and Texas Instruments were two of the biggest players in the high-end calculator market. There are plenty that still swear by their HP calculators. HP also has history in the PDA market, with the iPaq devices (that came along with the Compaq merger). Their most recent foray, however, ended in something of a disaster, with their adventure with Palm.

While HP is still a bit player in the mobile computing space, offering some Windows 8 tablets, they are still more focused on notebooks and ultrabooks. Would HP want to try another dip in the mobile computing pool? While it might make some sense on paper, I believe that HP will stay away. The company has enough challenges trying to right the ship, and adding another significant moving part may be more a distraction than a benefit. While I wouldn’t be surprised to see HP take some interest in Blackberry, I doubt it would be all that serious.

The Not-So-Obvious Players

There are few companies that could potentially want Blackberry. Apple is one that comes to mind. Certainly, Apple would be able to add Blackberry’s patent portfolio to their arsenal in their continued crusade of Marketing By Courtroom. But Apple could also benefit from Blackberry’s strength in enterprise integration and security, and further bolster both iOS and OS X in that regard. If nothing else, it would take these technologies away from the other mobile platforms, making it a defensive move in their part.

ASUS is another company that might want to look at Blackberry to further expand their mobile computing story. Their interest would be beyond the obvious assets, and might include a desire to have the Blackberry hardware team as part of the portfolio. ASUS has been building Android tablets, and has only dipped their toe in the water with the Fonepad. With Blackberry as part of their team, it gives them the ability to rapidly jump into the smartphone market as well.

The last not-so-obvious-but-kinda-are is Microsoft. Windows Phone has not fared well, failing to capture any meaningful global marketshare over and above what it inherited from Windows Mobile. Their Nokia partnership has amounted to almost nothing. With the Surface Pro and Surface RT, Microsoft has demonstrated some willingness to build their own hardware, and not just rely on OEM’s. Adding Blackberry to the team would give Microsoft the ability to build a Surface Phone, and have their own, made-in-Microsoft solution for mobile computing. Now, the Surface has not done well. Microsoft had to write off nearly a billion dollars worth of unsold inventory. The Surface saga may cause Microsoft to back away from being their own device manufacturer. However, their recent reorganization may be somewhat tailor-made for adding Blackberry to the fold.

A Word Of Caution

All of this is, obviously, pure speculation, and while many on the Intertoobs continue to position a sale as the “obvious outcome” of the latest strategic review, there are a few important things to consider. First, this isn’t the first time they’ve done this. When they were called Research In Motion, they started a similar review back in the spring of 2012. This was started shortly after Jim Balsillie and Mike Lazardis had left, and Thorsten Heins was elevated to the top job. While there was no formal result published, it would appear that the review as basically shoved aside as Heins made it clear he meant to rebuild the company. His goal was to return the company to prominence on the back of a revamped marketing and branding effort (which included renaming the company after it’s primary product) and the release of Blackberry 10.

During the last review, a sale of the company was one of the items on the list. That, however, doesn’t mesh with the “try to save the company” goal. I’m just not sure that Blackberry can be saved. They continue to reduce headcount, meaning they will be losing key people as time progresses, making a recovery that much harder. You can only reduce so much before you’ve trimmed all the potential fat, and are cutting into the muscle and bone of the company. Besides, I think saving Blackberry is beyond the skills of anyone currently in senior management. This is a team of caretakers, not risk-takers.

This go-around, the sale option is probably the company’s only real chance of salvaging anything for the shareholders. It won’t be good news for the people, and that is a sad thing to consider. Blackberry has, and had, some good people. It isn’t going to look good for the Canadian technology scene either, although we still have plenty of innovative companies. The presence of Blackberry was irrelevant to their creation and success. Some may see this as a “big picture” problem, but seriously, Blackberry’s influence didn’t extend all that far from the Waterloo area. It looks good for politicians. It makes zero difference to tech companies east of Toronto and west of Sault Ste. Marie.

Now we wait, and see what turns up. In the mean time, we get to see the company stumble and stagger around until the next major event occurs.

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