The highway of mobile technology is littered with broken companies and products. Apple Newton, Go, Palm, and many more could easily be characters in a info tech version of a Bruce Springsteen song. And now BlackBerry, previously Research in Motion, is heading out on the road for one last separate deperate try at relevance. But, like the characters that populate The Boss’ New Jersey, a last chance shot at happiness usually ends in disappointment and that’s pretty much what will happen to BlackBerry.
After horrendous quarterly results that included announcements of layoffs (on top of previous layoffs), an enormous quarterly loss, burning through $500M of its cash cushion in one quarter, and a reduction of their smartphone products from six models to four, it was not much of a surprise that they agreed to be purchased by a group led by their largest shareholder, Canadian investment company Fairfax Financial Holdings, Ltd for $4.6B. No matter what the price, it feels like throwing good money after bad. Maybe someone figured out the breakup value and came up with a number north of $4.6B, Or else it was simply pride in my northern neighbor’s technology prowess. Either way, it’s hard to see what can be done with BlackBerry now.
Actually, that raises the question: Is there value left in BlackBerry? Sure there is which is why, like Motorola, the parts are worth more than the whole. First off, BlackBerry has a lot of patents. That’s always helpful in the mobile technology arena. They have secure messaging and email software that would be of value to any of a number of companies that want to create more secure mobile products. That’s the real star in the BlackBerry sky. They still have millions who subscribe to their secure messaging service, though that number is dropping. They also own the QNX embedded RTOS – that’s real time operating system for you non-total-geeks. It’s pretty useful for the small devices that are beginning to make up The Internet of Things. There’s usually not a Google-dollar of money in embedded operating systems but there is value in one robust enough to power medical systems (really – medical monitors and important things like that).
They also have… actually that’s pretty much it. Sorry to say there is not much else of interest. Most of the company was involved in the smartphone business and that has been a bit of a disaster. The BlackBerry 10, the newest touch screen smartphone, was so uninspiring that the company has to write down something in the neighborhood of $900M in unsold inventory. Worse than that, many enterprise application vendors have stopped developing mobile applications for the BlackBerry. They can talk about moving away from the consumer and focusing on enterprise but that strategy is irrelevant if the application software companies don’t go along with it. From what I can see, they’re not. Few new enterprise application company bother to develop for the BlackBerry and many old time partners don’t seem to have them in their future plans. Some enterprise software companies are quiet about their BlackBerry plans but none are running to stand beside them and publically lend support. Instead, they are only supporting customers who have been using BlackBerry devices for a while and will eventually wean them off the nearly irrelevant devices.
I expect that Fairfax will make a noise about finding a new strategy to keep the company whole rather than tussle with Canadian regulators. As soon as the deal closes though, I imagine them selling off the patent portfolio and software assets as soon as possible. There will be takers of course. The secure messaging applications alone will be interesting to practically every major information and mobile tech company. QNX could go to a major customer or perhaps a company like Google that wants to embed themselves in all types of devices. Mostly to get the data from those devices but that’s a discussion for another day.
What about the mobile handset business? Nothing comes to mind. Maybe they can convince HP or Dell to take a shot at it. Both companies would certainly benefit by having a native and robust mobile device capacity. Probably not enough to spend the money and deal with the distraction. On second thought, they both have enough problems to fix right now without trying to absorb a mess like BlackBerry’s handset unit. Far more likely, the unit will declare bankruptcy and disappear.
Sorry to say, BlackBerry is finished. Kaput. Done like dinner. I hope they can prove me wrong but I wouldn’t put money on it. Too bad.
