BlackBerry's Best Survival Plan Is as a Private Business Phone Maker

 
 
By Wayne Rash  |  Posted 2013-09-24 Email Print this article Print
 
 
 
 
 
 
 


But of course, it’s not a done deal. Fairfax could decide during the due diligence period that BlackBerry isn’t worth $9 a share, in which case the $4.7 billion deal could unravel. Or BlackBerry, which retains the right to shop itself to another buyer, could find another date to the prom.Then it would have to pay Fairfax a penalty of about 30 cents a share. BlackBerry Founder Mike Lazaridis is apparently thinking about making a bid for the company he started up partly with money borrowed from his parents.

But let’s suppose for now that all goes according to plan, and BlackBerry does take itself private with the help of Fairfax Holdings. What’s next?

First, the company could stop spending money competing with consumer phones such as the iPhone and with Android phones and focus its effort on its corporate users. This would mean actively working with app developers that support enterprise users and it could stop spending money on games and entertainment apps. Right now, the weekly lists of new BlackBerry apps seem dominated by low-end games that provide little incentive to buy a high-end smartphone.

Instead, BlackBerry could spend money to support the kinds of applications that that enterprise and government users are likely to need, including financial services apps, front ends for customer management systems and ERP systems and productivity systems such as Microsoft Office. And yes, BlackBerry will need to help fund such app development because of its small market penetration. But the company needs business apps much worse than it needs another video game.

Likewise, BlackBerry needs to keep development alive on its enterprise and business devices and software. Few people realize that BlackBerry’s QNX software is a major player in the automotive and embedded systems market. These markets don’t get a lot of visibility, but they’re critical systems for the companies that use and sell them.

This is not to suggest that BlackBerry will abandon its existing customer base since its Z10 and Q10 smartphones are important to the company’s long-term future. But it may mean that the BlackBerry 7-based legacy systems may be around longer than previously thought, and it may also mean that devices clearly aimed at high-end consumers, such as the Z30, may get less attention to their hot new sound systems and more attention for their built-in security.

Ultimately, the move to go private means that BlackBerry has realized that it’s never going to compete with consumers the way the iPhone does, nor will it become a mass market favorite like Android. But BlackBerry’s chance at survival is in the niche it knows best—the enterprise, where it has its best chance for survival.



 
 
 
 
 
 
 
 
 
 
 
 
 

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