Ten years ago BlackBerry Ltd. (BBRY) was the king of the burgeoning smartphone market. But after years of falling behind rivals Samsung and Apple Inc. (AAPL) with little hope of recovery, it appears the company is finally throwing in the towel. On Monday, BlackBerry formally put itself up for sale, with CEO Thorstein Heins simply saying, “Let’s see where this goes.”
The company hired JPMorgan Chase & Co. (JPM) to assess their value and help them mull their options. The company could either enter into some kind of joint venture, or sell outright.
BlackBerry has seesawed in 2013, garnering record order shipments in March, then posting abysmal earnings in June. The company has simply failed to keep up with a rapidly changing market, and for a tech company, that’s a recipe for disaster.
The attractiveness of smartphones has become increasingly dependent on the software driving them, and not the hardware. Apple has the money to develop features like thumbprint ID technology for their iPhones. As their cash-on-hand dwindles, Blackberry has nothing in development that even comes close to approaching that level of innovation.
There are several options for BlackBerry’s future. It could go private, like Michael Dell is hoping to do with struggling PC maker Dell Inc (DELL). It could also sell out to a Chinese company like Huawei or Lenovo that wants to break into the American market.
Or, it could be bought out – and then scuttled entirely. As Recon analytics analyst Roger Etner speculates, although BlackBerry carries a reported $10 billion price tag, they do carry 5.4 percent of the American smart phone market. It could be profitable for a large company like Microsoft Corp. (MSFT) to claim that share by buying BlackBerry and then, as Etner put it, just “cannibalize or kill it.”
BlackBerry's stock jumped for the second straight day on the news, and is up 7.14 percent to $11.55 a share, paring back an advance of as much as 10 percent earlier in the day.
(Image: Research in Motion offices, courtesy of Fotopedia)
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