Many times over the last few days I’ve seen the words “die BlackBerry” in various places. Apparently, this isn’t German for “the BlackBerry” but, rather, people predicting its death. Allow me to break from the pack. BlackBerry ist nicht tot, as the Germans would say. I see the chance for a smaller, leaner, more focused BlackBerry to succeed, and maybe even thrive.
Of course, BlackBerry’s future is very much up in the air. The Fairfax Financial Holdings deal is just a letter of intent; they could do their due diligence and run screaming. They could lower their offer. Another bidder could come in. And any successful buyer could either decide to retool and refocus, with an eye to an eventual sale or IPO, or they could sell the company for parts, stripping off the patents and other pieces to the highest bidder. And Fairfax still needs to raise the $4.7 billion; we don’t know who is in their mystery consortium.
Let’s assume for a moment, though, that Fairfax (or another suitor) succeeds in taking BlackBerry private, and decides to rebuild rather than destroy. There is a scenario for a smaller, more focused, and yes even profitable BlackBerry to emerge.
We see the seeds of this shift already, in the few days since BlackBerry warned of poor second quarter results on Friday. At the same time, BlackBerry signaled its intention to focus on the prosumer and enterprise market, essentially abandoning its efforts to win over the mass consumer market. It has been this poorly executed and likely impossible attempt to become Apple, driven by investors demanding more revenue and more returns, that has led BlackBerry to its current troubles. As part of this shift, the go-forward product lineup has been cut from six devices to four, and some 40 per cent of the company’s employees were let go.
Even if the turnaround happens, those employees aren’t coming back. The old BlackBerry is dead, but in its place a new BlackBerry may emerge. One that goes back to doing what it once did well, before investor peer pressure pushed it to try to become Apple: a smaller company focused on providing secure handsets to the enterprise market, and tools and services for helping enterprises security manage their mobile devices.
Mobile device management may be the next big market; many vendors are jumping in and BlackBerry is already well positioned with BlackBerry Enterprise Service 10 and Secure Work Space for iOS and Android. And on Tuesday, BlackBerry made a bevy of announcements designed to signal momentum in this space.
There isn’t an Apple-sized business opportunity here, but there’s the opportunity for a healthy, profitable business for BlackBerry if it focuses on what it does well. If it’s going to happen though, we all need to reset our expectations, and realize it’s going to be a smaller, niche BlackBerry, and not the smartphone giant it once was. That’s something the financial analysts and speculators will never accept; that’s why going private and getting out from under their nonsense is such a key first step.
So, it’s possible, but can they pull it off? All I can say is maybe. They’d have had a much better shot a few years ago, before they’d burned through billions more in cash. And nothing I’ve seen from Heins so far convinces me he’s the man that can do it.
But for those of us though that still hold a little patriotic spot in our heart for the Canadian tech (one-time) darling, let’s wish them luck.
