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Canadian “crown jewel” BlackBerry announced this morning that it is mulling options that could include joint ventures, partnerships or an outright sale. The struggling smartphone maker, the pioneer of “on-your-hip” email, is no longer so hip, and has bled market share to Apple’s iPhones and Android smartphones. The company has been trying to turn around its fortunes with its new BB10 line of phones, but its latest quarterly results, released in late June, made it clear it wasn’t living up to expectations. The company’s share price on the Toronto exchange is down 15% this year.
BlackBerries have traditionally been a favorite among corporate IT departments “because of their security and manageability features”, but few people actually want to use the devices, writes the FT. The FT added that the company’s fortunes have declined as the BYO-smartphone-to-work trend has grown, with customers clearly preferring Apple and Samsung products.
Some variation on a BlackBerry breakup or sale has been predicted for a while: the company first announced that it was exploring “strategic partnerships” over a year ago. Shares have plunged to around C$10.75 a share after peaking at about C$150 in June 2008. Last summer, Gizmodo’s Sam Biddle wrote, “the ship is sinking, on fire, and covered in ants”, and suggested that BlackBerry (then called Research in Motion) should sell off the valuable parts of the company, including its popular BBM messaging service — although it’s unclear whether that is actually a practical option from a technological standpoint. And, as Matt Yglesias points out, “you’re really talking about liquidating the company at that point, not a strategic partnership of any kind”.
Is there anyone out there who might be willing to buy a struggling smartphone company in an age dominated by scale? Christopher Mims suggests Microsoft might be waiting in the wings, noting that “the deal doesn’t necessarily make much sense, but Microsoft has a habit of copying Google’s moves”, referring to Google’s 2011 acquisition of Motorola, whose technology allowed Google to release the Moto X smartphone this month. However, the FT reports that Microsoft — as well as Samsung, Nokia, and Lenovo — have already ruled themselves out.
Private equity firms might be another option and Reuters reports that the company has talked to Silver Lake Partners about some sort of collaboration. However, the company’s Canadian identity is also a consideration, as BlackBerry’s success is a “point of national pride” for the country, and Ottawa is known for scrutinizing takeovers of home-grown companies. But even Canadians are admitting defeat with BlackBerry, and the only option might just be to let it go. — Shane Ferro
On to today’s links: