The smartphone’s poor reception
BlackBerry, one of the world’s most prominent pioneering companies in the smartphone market, once bigger than the Apple iPhone, might be up for sale. The declining Canadian company reported on Monday that it was seeking other potential joint partnerships in an attempt to enhance sales of its comeback device, the BlackBerry Z10. But is it a case of too little, too late? Is it really going to be enough for BlackBerry just to match other touch screen devices in the market?
A special board committee has been formed to consider the company’s value and options with the view to a sale. “Given the importance and strength of our technology and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives,” said board member and the committee’s serving chairman Timothy Dattels in a statement. BlackBerry’s current president and chief executive Thorsten Heins, who joined the company in 2007, suggested that for BlackBerry, this would mark a new beginning. Others are yet to be convinced.
BlackBerry is clearly seen to be lagging behind other thriving companies in the market, such as Apple’s iPhone, with Samsung, HTC and Google riding on its success. The question that seems to be on most people’s lips is whether the sale will be public or private.
Edward Jones analyst Bill Kreher suggests that BlackBerry’s best bet would be to go private. “We don’t see a strategic buyer but perhaps a private equity company that could take some time to turn around the business without the scrutiny of Wall Street,” he said.
BlackBerry once controlled the North American smartphone market in 2009 by 51%, according to research firm Gartner. It happens to carry some valuable assets that could still be of interest to potential buyers, such as Samsung or HTC, since they do not appear to develop their own operating system, like BlackBerry does. However, the ownership and development of an operating system does not a King of Mobiles make and this bargaining chip as bait has yet to be bitten.
Whilst BlackBerry was being flat-footed and still pandering to the business world by creating devices that took far too long, in this rapidly progressive world of technology, to carry multiple cameras, other companies were following the zeitgeist and giving the public what it wanted – touch screen technology and a broad spectrum of compatible apps. With the development of multi-device compatible software applications such as What’s App and particularly Viber, which enabled callers to talk to friends, family and colleagues for free – a much welcomed application during the current financial climate – BlackBerry dragged its feet, trying to remain exclusive with BBM for too long, forcing consumers to either stick to texting on a tiny screen with tiny buttons or break free and explore other avenues. BB’s efforts to claw its way back up the ladder with its launch of the Z10 range, in an already touchscreen-saturated arena that had raised the bar above what BB was capable of, or willing to meet, was a case of “too little, too late,” a sentiment also echoed by Gartner analyst Carolina Milanesi. She said, “By the time it arrived, people had already made the decision to move on, based on the consumer side and enterprise side.” BB’s lack of foresight and slow response to iPhone and Android devices resulted in its percentage of the market dropping last year to a very disappointing 2%. The current percentage held by the company stands at 3.4%.
Roger Entner, founder of Recon Analytics was doubtful that going private would do anything to help BlackBerry at this late stage. “I don’t think them going private will help at all, and I think exploring strategic options like selling themselves is a little bit late,” he said.
The days of riding the crest alongside other major players in the game are gone and so it seems, is Mike Lazaridis, BlackBerry’s co-founder, formerly its co-chief and co-chairman and also predecessor to Mr Heins, who once upon a time promised us a new beginning.
By Brucella Newman
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