Shares of BlackBerry are up more than 10% today after the company surprised the market by announcing that it had hired JP Morgan to explore strategic alternatives, including a possible sale.
The Canadian company said it was doing this to redouble its efforts in promoting its recently launched BlackBerry 10 platform, but hinted at the larger opportunities of its network.
CEO Thorsten Heins, who has deflected talk of the company selling itself off since taking the top job last January, explained why he was now on board with the plan.
“We continue to see compelling long-term opportunities for BlackBerry 10, we have exceptional technology that customers are embracing, we have a strong balance sheet and we are pleased with the progress that has been made in our transition,” he said. As the special committee focuses on exploring alternatives, we will be continuing with our strategy of reducing cost, driving efficiency and accelerating the deployment of BES 10, as well as driving adoption of BlackBerry 10 smart phones, launching the multiplatform BBM social messaging service, and pursuing mobile computing opportunities by leveraging the secure and reliable BlackBerry global data network.”
So who might help BlackBerry do this? The rumour mill says that company might be struggling PC maker Dell.
One source says private equity firm Silver Lake Partners, who were hired six months ago to take BlackBerry private, has already met with BlackBerry management to discuss a collaboration. The appeal for Dell, which has virtually no presence in mobile is clear, but what about BlackBerry?
Dell’s shift in focus, many suspect, would come in the form of a massive push to the enterprise and to cloud based solutions, similar to what IBM did years ago.
Can this work? Talking to Cantech Letter last summer, Descartes CEO Art Mesher pointed out that IBM’s decision to get out of the PC business was critical to its later success. He said history shows that hardware always becomes commoditized, and that those that emerge as integrators always walk away with the crown.
“History is just repeating itself” he said. “Historically, since the advent of the microprocessor hardware has become a commodity over time leading to a new world of open applications and content.”
Mesher said that the two parts of BlackBerry’s business, selling at handsets and operating a network, were often at odds with one another.
“It is difficult to inhale and exhale at the same time” he said, adding: “You can’t be neutral and then build something that competes against everybody.”
Could the considerable combined resources of Dell and BlackBerry get the pair out of the hardware business and into the cloud, where they could both shed rapidly commoditizing low-margin businesses and become a viable international integrator?
Right now, the pair seem like frat brothers who have survived the same hazing ritual. Is that common ground enough of a basis to form a permanent partnership?