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BlackBerry for sale

With the smartphone giant up for sale, what lies ahead? Rajiv Makhni wonders.

brunch Updated: Aug 31, 2013 17:44 IST
Rajiv Makhni
Rajiv Makhni
Hindustan Times
BlackBerry,HT Brunch

It was fairly late at night when I glanced at my phone for my last check on all the people who I was sure can’t live without me and my awesome inputs in their life and work. Hmmm… no emails, no messages, no missed calls and no BBM and WhatsApp reach outs either. Obviously, the network must have collapsed as it was impossible that the world was carrying on without me. Just as I was tapping the red light notification on my phone to make sure it was working, up popped a WhatsApp message: “We should all contribute Rs 500 each for Rajiv to buy BlackBerry.”

As I was trying to understand why my WhatsApp ‘Obsessed with Fitness’ group wanted to collectively buy me a BlackBerry phone, up popped a follow-up message.
“Not BlackBerry the phone, but BlackBerry the company”.

BlackberryYes, I use a BlackBerry as my primary phone and yes, I am ribbed about it all the time and yes, my fitness group were a bunch of jokers. But despite the sense of humour and this horribly mean comedy routine being thrown at me, there was a certain sadness that consumed me as I read the barrage of jokes that followed. BlackBerry, the company that started off the whole smartphone revolution was actually up for sale.

But weren’t they on a great comeback trail? They absolutely were. They revamped all that was wrong with their ageing OS, they took out the all-new OS10, which was written from the ground up , they released three OS10 phones in quick succession and even announced that BBM would go multi-platform and be available on iOS and Android. But they made a fatal mistake on pricing. The Z10 and Q10 were priced as high as an iPhone 5 or a Galaxy S4 and their ‘economy’ Q5 was actually priced higher than most mid- to high-end competitors.

For most BlackBerry users, the next level was just out of budget and unaffordable. Plus, there wasn’t a sub-R10,000 BB OS10 phone on the horizon. There are many rumours of new OS10 phones including a big screen phablet coming up, but each is once again a premium category offering. Thus for the largest user base of BlackBerry, BB didn’t come up with a phone!

So, is it the end of BlackBerry?
Far from it. BlackBerry has gone public with a ‘For Sale’ sign, but in private, negotiations may have been on for a while. This isn’t a Sell-And-Shut-Down business model, this is a Put-Some- Money-In--Save-A-Great-Company-And-Take-It-To-New-Heights model.

They may even want to take it private and move away from taking bad decisions to keep shareholders happy. In fact, this entire silly pricing model on their new phones seems to have been done to paint a rosy future picture for shareholders. It’s not going to be easy to get a buyer and it’s going to be even more difficult to find money to take it private. But one of those two things will happen soon.

Haven’t they screwed UP their own future by announcing this publicly?
Yes, they have. The first big reaction will be from customers of BlackBerry phones. The confidence level will have eroded and they may well shy away from buying a phone from a company that they think may not be around to take care of them. The second big hit will be from developers. Will they be willing to put in time, effort and investment into developing apps for a company that may shut shop soon?

The reason BlackBerry had to announce this has to do with disclosures that are compulsory for a publicly traded company. And while BlackBerry isn’t going away anywhere, it’s going to be a herculean task to convince the world about that.

What is BB selling?
Good question. It could be that they are selling off the low-margin and not-so-profitable hardware business and want to concentrate on BlackBerry and BBM services (just like IBM did a few years ago). It could also be that they retain everything and sell off large assets and patents (patents are the new gold in technology; Motorola was bought at a super-premium due to the patents it held). Or they could license the BB name and let others manufacture their phones (an Android and Windows like business model). They have lots of choices here.

Who should buy them?
That’s the billion-dollar question. Lots of suitors would be perfect for them. There’s Apple, who could buy them out to get all their enterprise business (BB is still strong there and Apple is still relatively weak). There’s Samsung, which could do it to consolidate business and take out a rival (plus they could get a large number of patents in the bargain). Microsoft could be a contender as they could do it to keep Apple out of the deal and also make further inroads into the corporate world.

Then there’s Nokia, which could look at this as their second smartphone OS and get some serious sales numbers to add to their already improving Lumia series (just think how good a Lumia phone would be with BlackBerry email and BBM mixed with Windows). But the biggest bidders will come from China as there are big brands there that would be eager to get their hands on a big name like BlackBerry (though I doubt if the Canadian and US governments would be happy handing over BlackBerry security servers to the Chinese).

There may well be an AppleBerry, SamBerry, MicroBerry, NokBerry or a ChinBerry in your future. Which company should put in a serious bid to get one of the most recognisable names in the mobile phone world? I’m waiting to get your comments on Twitter on my BlackBerry phone!

Rajiv Makhni is managing editor, Technology, NDTV and the anchor of Gadget Guru, Cell Guru and Newsnet 3

From HT Brunch, September 1

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First Published: Aug 31, 2013 14:46 IST