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Blackberry Goes Private

September 23, 2013

It finally happened.

After months of limping along, Blackberry (formerly known as RIMM) succumbed to the pressures of the market, and agreed in principal to be purchased by the Canadian insurer Fairfax Financial. The chairman of Fairfax Financial, Prem Watsa, had withdrawn from the Board of Directors of Blackberry several months ago in order to avoid any potential conflicts of interest in the event of a buyout of the Canadian phone maker. The man is often referred to as the “Warren Buffet of Canada,” and his firm is known for their value investing strategy similar to how Berkshire Hathaway makes its investment decisions.

Covered in more detail in an earlier post found here: http://ssteinsmith.com/2013/08/14/why-go-private-blackberry-dell/ – this story has an additional of complexity that did not at first make the major headlines: the fact that the firm was considered a national source of pride.

Additionally now that Blackberry had agreed to, in principle, to be taken private there are several options that the struggling firm can take.

1) Sell off its handset operations to a firm like Lenovo that desires to enter the smartphone market.
2) Monetize its patent portfolio, which is worth in excess of $1 billion.
3) Focus exclusively on governmental and “sensitive” data clients
a.Although in the face of declining consumer demand it would be interesting to see the rationale behind why firms would use a product that consumers will not buy.
4) Become a software only, enterprise-like service provider utilizing its new O.S.
5) Attempt to develop products/services that can run on Android, the mobile O.S. that controls near 80% of global market share.

Whatever course of action, or combination of actions, occurs, it certainly will be interesting.

Happy Reading!

http://money.cnn.com/2013/09/23/technology/mobile/blackberry-private/

http://www.reuters.com/article/2013/09/23/us-blackberry-offer-fairfax-idUSBRE98M0YI20130923

http://dealbook.nytimes.com/2013/09/23/blackberry-reaches-4-7-billion-takeover-deal/?_r=0

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From → Discussions

4 Comments
  1. Hi Ssteinsmith,
    Thanks for that There had been loads of rumors in advance of time that proposed BlackBerry would launch a phablet. The 5-inch Z30, even so, is not substantial sufficient to warrant that title, and the firm by itself has positioned the machine mainly because the flagship for the holiday vacation time. That suggests the handset dodges comparisons with gadgets just like the Galaxy Observe, but instead stands inside the line of fireplace involving the Iphone 5s, Galaxy S four, HTC A solitary and Lumia 1020. As opposed to those other equipment, on the other hand, the Z30 is not packing any flashy, headline-grabbing specs, nor does it supply bleeding-edge internals that may possibly excite performance nuts.

    Their announcement would be the most present indication of investor desire in BlackBerry suitable following the corporation released a evaluation to take into consideration a attainable sale or break up of its operations When it will come to what is and isn?t interesting to probable purchasers about BlackBerry, it is really distinct that the organization business is amongst primarily the most eye-catching targets. The phone small business just isn’t viewed as an asset at all, RJF analyst Steven Li tells Bloomberg, owing to its steadily declining handset product sales figures. There is some superb news within the cellular phone enterprise, even so, as Canadian telco Rogers reversed its conclusion not to carry the BlackBerry Z30 smartphone.

    BlackBerry insisted on creating telephones with complete keyboards, even immediately soon after it became apparent that numerous people favored touch screens, which permitted for better online video viewing and touchscreen navigation. When BlackBerry finally did start a touchscreen gadget, it was noticed as a inadequate imitation from the Iphone. BlackBerry saw its equipment as fancy, e mail enabled cell phones. Apple and Google envisioned strong mobile pc programs and labored to make sending e-mail and browsing the Web as customer friendly as possible.

    The cuts come a month before long following BlackBerry introduced that it had formed a certain board committee to critique strategic possibilities that could include a sale of the company. The board is trying to find to carry out a speedy sale study course of action that could be wrapped up as early as December, in line with adult men and females acquainted with the subject. The development of a board committee was mostly seen analysts and investors as a concession that the cuts moreover the company’s new line of telephones experienced failed to degree BlackBerry with its competitors.
    Keep up the posts!

  2. Ola! Ssteinsmith,
    This might be off topic, however If they experienced performed this lots of several years ago, maybe it would have aided, but now it’s way also late, even though the ad does not explicitly mention the uncertainty bordering the organization, it supplies a selection of good reasons for its potential clients to retain the faith, such as BlackBerry?s debt free of charge of cost position, its sweeping cost slicing and its sizeable dollars on hand, currently, it appears a lot more like the SlackBerry, thanks to the Iphone and Android Samsung Galaxy gadgets, R.I.M.?s smartphone current market share has plummeted, for the reason that the listing shrinks of mates who when persistently communicated utilizing BlackBerry?s private messaging provider, identified as BBM, a ton of a BlackBerry operator is not heading to mince phrases about how they really really feel about their phone, the cultural divide amongst BlackBerry loyalists and anyone else has only grown additional intensive around the ultimate 12 months as corporations that formerly issued employees BlackBerrys and only BlackBerrys have began surrendering to employee demands for iPhones and Android run smartphones. The purchaser business business has extended been a getting rid of battle for BlackBerry, a lack of innovation has led to a perception that the business enterprise is guiding the situations, which signifies the model title no for a longer period retains cachet with customers, in change, the prime rated application builders have mostly abandoned the platform.

    A quickly deteriorating funds place would dent hopes of a sale, mostly mainly because private equity purchasers will increase money by borrowing against BlackBerry’s savings furthermore a sale of its mental household, the agency was when a dominant player within the smartphone sector, but has struggled to keep on to its marketplace place share amid growing competitors from rivals together with Apple and Samsung. a sale could offer the corporation necessary breathing room, removing the stress to satisfy shareholders anticipations mainly because it refocuses on business and governing administration buyers, it has ordinarily dominated this marketplace, You have bought masses of inventory sit all-around the shelf, the for a longer time it sits close to the shelf could be the a large amount much more resources will burn off. Let’s fall the price tag, unlock and unload all blackberry phones to the shopper industry place in time for the holiday buying year. The ads emphasize that the corporation has a lot of dollars on hand and no debt. BlackBerry also is touting the planned debut of its BBM messaging software for the Apple iphone and Android units. About 7 million individuals have at this time preregistered to turn out to be notified in regards to the rollout, in line with the adverts.This telephone BlackBerry Z30 is wonderful. Massive move up from the S3. Superior present, excellent battery life, stable truly feel and easy to get the job done with.
    Cheerio

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