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    Home Latest News
    • Mobile

    BlackBerry Spinning Off BBM Is a Good Idea Too Late to Help

    By
    Michelle Maisto
    -
    August 29, 2013
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      BlackBerry is said to be considering separating its popular BlackBerry Messenger (BBM) app from the rest of the company, which essentially has a for-sale sign hanging from it.

      On Aug. 12, BlackBerry announced the formation of a Special Committee to “explore strategic alternatives,” which it said could include “possible joint ventures, strategic partnerships or alliances, a sale of the company or other possible transactions.”

      According to an Aug. 27 Wall Street Journal report, BlackBerry has moved several executives over to its BBM division and is considering spinning it off into a subsidiary, which would be named BBM Inc.

      The move, said The Journal, signals a desire to position BBM as a valuable asset ahead of a potential sale, but analysts say the move comes too late.

      “I think the first words of BlackBerry’s epitaph were written when BlackBerry Enterprise Server [BES] began to fall out of favor with enterprises. BES was seemingly everywhere, then the iPhone happened, and then first waves of Android devices,” Jack Narcotta, an analyst with Technology Business Research, told eWEEK.

      “If BlackBerry had been faster to react to the sea change in the market and worked to integrate these new platforms, it might have become a player in mobile device management [MDM],” he continued. “Instead, it decides to support Android and iOS only as the MDM market is moving at light speed, and that market is significantly more crowded today than it was a few years ago.”

      In May, at its BlackBerry Live event, the company announced that, by the end of the summer, it would offer BBM to iOS and Android devices—a move that CEO Thorsten Heins called a “statement of confidence” in BlackBerry.

      BBM’s story runs parallel to BES, Narcotta added. “Too little effort made to open up to other platforms, too late of a response, and too crowded of a market. … WhatsApp has topped 300 million users. Imagine if BlackBerry had gotten to that market first.”

      Carolina Milanesi, a research vice president at Gartner, says BBM is certainly an asset for BlackBerry, but spinning it off may only highlight the competition it faces.

      “Right now, it is part of a larger proposition and a differentiator for BlackBerry. But as the user numbers decrease, for lack of devices and BB10 appeal, it is clear that even opening up to iOS and Android is not going to make a difference,” Milanesi told eWEEK.

      From a buyer’s perspective, she added, “It would only make sense for someone that already has a critical mass of users—like Samsung. Otherwise, the fight against popular apps, like WhatsApp and even Skype, would be too tough.”

      Analysts have suggested that BlackBerry, if sold, could be worth $10 billion—$4 billion to $5 billion for the business and another $4 billion or $5 billion for its intellectual property. The company has one of the largest patent portfolios in the industry.

      Regarding talk of a BBM spinoff, BlackBerry has said that it doesn’t comment on rumors or speculation.

      BlackBerry is said to be considering separating its popular BlackBerry Messenger (BBM) app from the rest of the company, which essentially has a for-sale sign hanging from it.

      On Aug. 12, BlackBerry announced the formation of a Special Committee to “explore strategic alternatives,” which it said could include “possible joint ventures, strategic partnerships or alliances, a sale of the company or other possible transactions.”

      According to an Aug. 27 Wall Street Journal report, BlackBerry has moved several executives over to its BBM division and is considering spinning it off into a subsidiary, which would be named BBM Inc.

      The move, said The Journal, signals a desire to position BBM as a valuable asset ahead of a potential sale, but analysts say the move comes too late.

      “I think the first words of BlackBerry’s epitaph were written when BlackBerry Enterprise Server [BES] began to fall out of favor with enterprises. BES was seemingly everywhere, then the iPhone happened, and then first waves of Android devices,” Jack Narcotta, an analyst with Technology Business Research, told eWEEK.

      “If BlackBerry had been faster to react to the sea change in the market and worked to integrate these new platforms, it might have become a player in mobile device management [MDM],” he continued. “Instead, it decides to support Android and iOS only as the MDM market is moving at light speed, and that market is significantly more crowded today than it was a few years ago.”

      In May, at its BlackBerry Live event, the company announced that, by the end of the summer, it would offer BBM to iOS and Android devices—a move that CEO Thorsten Heins called a “statement of confidence” in BlackBerry.

      BBM’s story runs parallel to BES, Narcotta added. “Too little effort made to open up to other platforms, too late of a response, and too crowded of a market. … WhatsApp has topped 300 million users. Imagine if BlackBerry had gotten to that market first.”

      Carolina Milanesi, a research vice president at Gartner, says BBM is certainly an asset for BlackBerry, but spinning it off may only highlight the competition it faces.

      “Right now, it is part of a larger proposition and a differentiator for BlackBerry. But as the user numbers decrease, for lack of devices and BB10 appeal, it is clear that even opening up to iOS and Android is not going to make a difference,” Milanesi told eWEEK.

      From a buyer’s perspective, she added, “It would only make sense for someone that already has a critical mass of users—like Samsung. Otherwise, the fight against popular apps, like WhatsApp and even Skype, would be too tough.”

      Analysts have suggested that BlackBerry, if sold, could be worth $10 billion—$4 billion to $5 billion for the business and another $4 billion or $5 billion for its intellectual property. The company has one of the largest patent portfolios in the industry.

      Regarding talk of a BBM spinoff, BlackBerry has said that it doesn’t comment on rumors or speculation.

      Michelle Maisto
      Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.

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