BlackBerry Board Thinks Company Could Compete as "Niche" Company
September 2, 2013 12:09 PM
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It could sell off other "subsets"
As BlackBerry struggles to compete with the larger smartphone makers like Apple, Google and Samsung, its board committee said it would consider making BlackBerry a niche company.
Bert Nordberg, director of BlackBerry's board, said that the company has created value in areas like enterprise business, hardware functionality and secure communications, but other "subsets" could be sold off. Nordberg didn't specify what those subsets are.
"I think BlackBerry is able to survive as a niche company," said Nordberg. "But being a niche company means deciding to be a niche company. Historically, BlackBerry has had larger ambitions. But battling giants like Apple, Google and Samsung is tough."
Nordberg also said that the company's value on paper and Wall Street's perception of BlackBerry's worth needs some work.
BlackBerry has been struggling to stay relevant with both Apple and Samsung/Google taking over the mobile market. Earlier this month, the company's board of directors announced the formation of a Special Committee to
explore strategic alternatives
to enhance the value and accelerate the development of BB10. The announcement came only a few days after a
that BlackBerry might go private in an attempt to fix its problems away from the public.
Nordberg joined the board as director back in February of this year. He was brought in along with retired Verizon executive Richard Lynch to try and fix the once-popular BlackBerry.
BlackBerry Z10 and Q10
Nordberg is a good candidate for the job because he helped Ericsson sell its stake in Sony Ericsson back to Sony. He was also a key part of Ericsson's restructuring process after it almost went bankrupt in the early 2000s. It resulted in almost 60,000 jobs cut and Ericsson's exit from the low-end market for basic mobile phones -- instead focusing only on smartphones running the Android operating system.
"As a CEO of Sony Ericsson, deciding to bet on Android was an easy decision," said Nordberg. "With BlackBerry things are definitely much harder. Blackberry's security framework is built into the mobile software, so you can't just decide to change operating system. But BlackBerry has cash and it has no debt, so I'm sure that we'll piece something together at the end of the day."
BlackBerry launched its new BB10 operating system in January of this year, hoping that the new line of devices with a refreshed OS could help save the ailing company. However, analysts have called the Z10 launch a "disaster" and BlackBerry
even fell from third place
to fourth in Q1 2013 for smartphone operating system shipments. Microsoft's Windows Phone booted BlackBerry for No. 3.
To make matters worse, BlackBerry posted
a surprise $84 million USD
($0.13 per share) loss for Q2 2013. It only sold 2.7 million BB10 devices as well when analysts expected 3.5 million.
Last week, reports said that BlackBerry executives were considering
of its messaging service BlackBerry Messenger (BBM). In addition, many carriers and smartphone resellers in the U.S. and Canada said that
the Q10 smartphone
has failed to sell as well as expected.
The Wall Street Journal
This article is over a month old, voting and posting comments is disabled
RE: That is the only way they can survive.
9/3/2013 9:56:19 AM
I think they can survive as a niche company, but I don't think they will have the resources to develop their own OS, their own enterprise software, their own phone hardware, and the necessary apps that as a niche company they aren't going to get others to develop for them.
Enterprise software that supports other phone is a possible niche.
BBM fits in reasonably well with this. The enterprise server can be used to route the messages and provide management of how messages are sent including encryption and retention policies.
They have been underwhelming in the phone hardware development.
The BB10 Operating System seems to have a pretty sound design, but they haven't been able to support its timely development in the past, and their resources have shrunk since then. There may be value in selling it and QNX IP off, but I don't think it can survive.
"A politician stumbles over himself... Then they pick it out. They edit it. He runs the clip, and then he makes a funny face, and the whole audience has a Pavlovian response." -- Joe Scarborough on John Stewart over Jim Cramer
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