BlackBerry was once the dominant name in smartphones. It now finds itself on the carving block, and its days as a whole company could be limited.
The Wall Street Journal brought its allegedly imminent sales to the forefront of the news cycle yesterday with a report saying, "Beleaguered BlackBerry intends to run a fast auction process that could be wrapped up by November." We spoke with some top industry analysts to learn their views on BlackBerry's future (being sold).
BlackBerry has accumulated an intellectual property portfolio, has an enterprise business and government contracts. Its worldwide smartphone market share has fallen below 3%, according to IDC's Mobile Phone Tracker for September 4th. Microsoft has surpassed it with Windows Phone.
In February, I wrote that BlackBerry was "throwing a Hail Mary" with its Z10 smartphone Super Bowl commercial. In the end, its smartphones may not even be what attracts prospective buyers. Here's what the analysts had to say:
Charles Golvin, Forrester Research:
"It's very difficult to identify a single company that would benefit from acquiring all of BlackBerry. Yet the company has valuable assets: 1) its BES [BlackBerry Enterprise Server] software for managing mobile devices; 2) its QNX operating system [a platform for embedded systems development], which has presence in industries such as automotive, core Internet routing, energy, etc.; 3) its BBM [BlackBerry Messenger] communications platform and brand; 4) intellectual property; and 5) a skilled workforce with depth of knowledge in wireless.
Individual companies could benefit from one or more of the distinct assets, including possibly Oracle, HP, Lenovo, and Cisco. I don't, however, see Microsoft in this list (though others apparently do).
So my belief is that BlackBerry will, essentially, be sold for its constituent parts and not as a going concern."
Another analyst demurred on the continued value of BES.
Steve Wildstrom, Tech.pinions
"The problem with the server business is that BB 10 uses [Microsoft] Exchange ActiveSync rather than traditional BES for mail-contact-calendar sync. This turns BES into basically a mobile device management server for BB and now Android and iOS, a fairly crowded field.
The government contracts are great for as long as they run, but not many agencies are looking to renew them. With both iPhone and the Samsung implementation of Android having certification for "sensitive but unclassified" use, they are essentially on an even footing with BlackBerry in security, taking away BB's biggest advantage."
Wildstrom didn't comment on potential buyers.
UPDATE: "Oddly enough, maybe Microsoft. But I think their value took another hit today with the warnings from knowledgeable folks who've studied the latest NSA revelations that elliptic curve encryption is the most likely to have been compromised. BlackBerry, through Certicom, owns most of the fundamental ECC patents."
Rob Enderle also had a short list.
Rob Enderle, Enderle Group
"They [BlackBerry] are valuable both for their patents and their large-scale government and enterprise deployments. Their platform is naturally more secure and they are well penetrated in automotive on the OS, which could be attractive to both Microsoft and Intel. Lenovo or Intel would likely be able to justify the highest price if the company didn't go private.
Lenovo because they want out of China on smartphones and there would be a ton of synergy between their strong ThinkPad products and BlackBerry [and] Intel because they need a strong beachhead and are working to expand their penetration into automotive. They would eventually likely spin the handset business out again so they could expand to other handset makers but the initial move would give them a footprint in an area they know well and they could apply technologies like Deep Safe, which they developed with McAfee to the phone making it far more secure than it is now and that could be a critical advantage which could be invaluable to government and Pharma, Legal, and Healthcare accounts. These two aren't exclusive either as Intel and Lenovo, who are currently working jointing on another acquisition I can't talk about, could approach his in partnership giving Lenovo the handset business and Intel the technology rights creating the least conflict, lowest individual cost, and best overall solution. While more difficult it would also be, by far, the most powerful for all three companies."