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Why an independent BlackBerry is now the most likely long-term scenario

BlackBerry CEO John Chen says his phone isn’t ringing with offers to buy the company. It once seemed almost academic that BlackBerry would be snapped up by a competitor, ending the death by a thousand paper cuts saga the company has endured since the launch of the iPhone, and closing the book on Canada’s best known tech.

But midway through 2014 it doesn’t look that way at all. The most likely scenario is now that BlackBerry will remain BlackBerry, with a little help from a potential partner, not acquirer.

Believe him or don’t, but CEO John Chen told Bloomberg today he has no irons in the fire.

“I don’t have any offers on my desk,” Chen told reporters Emily Chang and Olga Kharif. “If people would like to talk, I mean, talk is not an offer.”

Contrast this quiet against the din of last September, when Prem Watsa’s Fairfax Financial made a (U.S) $4.7-billion offer to take BlackBerry private. The company said it was conducting an internal review that would see it explore all avenues that might increase shareholder value, street speak for “make us an offer”. Rumours abounded at that time that BlackBerry would make sense to suitors such as Dell, HP, IBM, or Microsoft, a scenario that was taken off the table when that company acquired Nokia. The inevitable gutting of a once proud mobile device giant meant a very bad day for Finland, not Waterloo.

Before BlackBerry, John Chen was best known for his turnaround of Sybase, where he became CEO after the company had posted four straight years of losses. Chen is not a poker player prone to showing his hand, but it seems increasingly likely that that experience is informing a confidence in him that he can do the same at BlackBerry.

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The man who pegged Blackberry’s chance of survival at just 50% earlier this year recently raised that number to 80%. In May, at the Re/code Code Conference in California, Chen revealed a new confidence. “I am quite positive that we will be able to save the patient,” he said.

But it’s not just Chen’s words that have driven a recent resurgence in BlackBerry’s share price, it’s his results.

Late in June, BlackBerry posted Q1, 2015 results that saw a surprise profit of (US) $23-million or four cents a share on revenue of $966-million. Street consensus saw the company showing a loss of $0.25 on a $979-million topline.

Another reason to believe that BlackBerry won’t be on the block again was recently explored by former analyst Chris Umiastowski. Umiastowski, writing for CrackBerry, says the recent deal between Apple and IBM sets the table for a similar partnership for BlackBerry, which some may be surprised to hear is still a major enterprise player.

“Several months ago BlackBerry put itself up for sale and, judging from the outcome, there was no known serious interest,” said Umiastowski. “But here we are now with big things happening in the MDM market. A giant flashlight is now shining on the space, and it happens to be one where BlackBerry has the #1 market share. If you are Microsoft or Google I have to think your interest in some sort of richer BlackBerry partnership just went up, at least to solidify the MDM and security aspects of the business.”

For Chen, the market acceptance of the Apple/IBM deal grants him the permission to make a major deal that isn’t an outright sale. It’s a subtle but important shift; a similar deal for BlackBerry would almost certainly be roundly cheered by the street instead of offered as evidence that the Canadian company simply could not stand on it own.

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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