If Lenovo Buys BlackBerry, Obama Could Lose His Phone: Report

The U.S. government, knowing even an encrypted phone can be cracked into, could take back President Obama's BlackBerry if Lenovo buys the company.

If Lenovo, the China-based, global top-selling computer brand, buys BlackBerry, President Obama may lose his coveted smartphone, The New York Times reported Oct. 25, citing "officials."

Obama was an avid BlackBerry user when he took office in January 2009, and after refusing to be smartphone-free, he received a National Security Agency-approved version with enhanced security but the ability to contact only a limited number of senior staffers and close friends. The device reportedly cost $3,350 and was quickly dubbed the "BarackBerry."

But even a fortified device isn't likely to pass muster, if a China-based company is behind it, the thinking goes, for fear of spying. The United States' fears are well-grounded in experience. The materials leaked by once-NSA contractor Edward Snowden revealed that the United States has been spying on Obama's peers, including the smartphones of German Chancellor Angela Merkel.

But just as Bill Clinton didn't inhale, Obama hasn't been reading Merkel's texts.

The U.S. government maintains that the president was completely unaware that the device was being monitored.

"The tapping in fact appears to have begun roughly a decade ago, during the George W. Bush administration," the Times reported. "Yet it is unclear what motivated the Bush administration to monitor her cellphone—she appears to have at least two, and the target apparently was her personal one—or why Mr. Obama seemed unaware that was happening, even five years into his presidency."

The Times added that on Oct. 24, Merkel "waved a new, encrypted cellphone at reporters" in Brussels, Belgium.

(Presumably, Merkel knows by now that the NSA has employed tactics that have enabled it to access content that had been considered secured through encryption.)

While the U.S. House Intelligence Committee has outright warned U.S. businesses involved in critical infrastructure about doing business with Chinese brands Huawei and ZTE, Lenovo, which spokespeople like to brand as a global company, less than a Chinese company, is another matter.

In 2005, the U.S. government approved Lenovo's $1.25 billion purchase of IBM's PC business—at the time, it was one of the largest acquisitions of a U.S. company by a Chinese company—and today Lenovo has operations, research and sales headquarters in North Carolina, and this year opened new manufacturing facility there as well.

The Canadian government is expected to carefully consider any offer for BlackBerry that Lenovo might make, but analysts widely expect that Lenovo won't be turned away over security concerns.

BlackBerry announced in August that the company, which has struggled to turn around its business, as hoped, with its new BlackBerry 10 platform, is open to "strategic alternatives."

On Sept. 27, BlackBerry posted a quarterly loss of $965 million.

Four days earlier, BlackBerry announced that it had signed a letter of intent with Fairfax Financial Holdings, its largest shareholder, for $4.7 billion. The terms of the agreement give Fairfax until Nov. 4 to perform due diligence, and until that time BlackBerry is free to entertain other offers.

While no other formal offers have been announced, Google, Samsung, Cisco and SAP, in addition to Lenovo, have reportedly looked into buying at least a portion of BlackBerry. Mike Lazaridis and Douglas Fregin, co-founders of Research In Motion (the company changed its name to BlackBerry with the introduction of BB10 in January), have filed documents with the Securities and Exchange Commission, also making their interest in the company clear.

Regarding the United States' spying practices, the Times quoted a former senior official who talks to President Obama on intelligence matters. "'Sure, everyone does it, but that's been an NSA excuse for too long.'"