Blackberry was back in the news yesterday and today with the news that they have called off the search for a buyer and are instead looking for a new CEO. According to the news reports that I’ve read there were talks of other companies thinking about buying Blackberry.
My big question to this is simple.
Buying Blackberry as best as I can figure out comes with a massive cash requirement and not much to show for it. If you buy the entire Blackberry company you get the joy of paying to maintain the blackberry service which every Blackberry out there requires so that they can still use the data network. This is because for any Blackberry to send and receive data the phone has to be able to talk to the Blackberry servers which are run out of Blackberry’s data center in Canada. Running these servers will also require staff, and IT staff isn’t free.
Of course you’ll also get the Blackberry inventory of phones that haven’t been sold, most of which probably won’t be because the large majority of Blackberry users are corporate customers, and companies don’t upgrade their employee’s cell phones all that often. And when they do, odds are they won’t be purchasing new Blackberry phones for them.
So what would a company get if they were to purchase Blackberry? They’d get some pretty smart engineers, some good software and hardware patents, and that’s probably about it. Everything else that they’d get is a massive cost with little to no return.
In the article I linked to above it says that the companies largest shareholder is going to dump $1B into Blackberry to try and reboot the brand. Frankly I fail to see why. Blackberry was a major player for a long time, but they made the ultimate mistake, they failed to keep up with market trends. And because of that their loyal following of customers have mostly left. Hell I myself was a loyal Blackberry user for over 10 years. But when they released their crappy 1st and 2nd attempt at a touch screen and their was no change to the slow startup speed of their phones I dropped them for an Android phone and I’ve never looked back. And frankly I’m glad that I did.
If Blackberry (or RIM or whatever name you want to refer to them by) had made some different decisions a few years ago they would still be a major force to be reckoned with. But today they are a joke in the consumer market, and they are loosing more and more of the corporate market every month.
I’m sure that this dumping of cash into Blackberry by their investor is an attempt to try and control the situation so that they can get some return on their prior investment. But I’ve got bad news for them. At this point I’m pretty sure that they are just throwing away money. Their best bet at this point is probably to inform the users that they are going to shutter the company in X months giving the users time to get off the Blackberry phones. Then auction off the patents to the highest bidder (these guys were doing two way devices way before anyone else was, I’m sure there’s some good patents in there), and sell the rest for scrap. This wouldn’t be pretty or popular, but I’m pretty sure that it’s the best business decision that they could possible make.
Sadly I’m pretty sure that they won’t take my advise, so we’ll have to see if I’m right or wrong.