Recent times have seen Blackberry smartphones being met with a lukewarm response from the tech market. It was no surprise to anyone when the company was put up for sale in the market.The potential buyers are more likely to sieve out its more tempting assets like software and patents and dismantle the firm. The OS and patents are approximated to have a value of about $5 billion, which is also the company’s market value at the moment.
Future Buyers may have an eye on BB’s greatest assets
As Blackberry smartphones have made a gloomy entry into the market followed by the company being put up for grabs. The phone unit of the company barely lives today. Blackberry made most of its revenue from the phone unit. The phone unit will probably be closed down by potential buyers as they would prefer their own technologies. This might burn a hole in their pockets of around $800 million, claim analysts at Raymond James Ltd. and BMO Capital Markets.
This is a surprise for no one considering tech pundits had been waiting for Blackberry to wake up and smell the market air for a while now. After being kicked to the curb because of their dire lack of an interactive screen the company returned with sets like the Q10 that made keyboard enthusiast jump up and down in glee the only problem, one that had plagued the company into losing its position as tech king, was that consumers who like keyboards are too few in number.
Analysts also suggest that the patents, software and secure networks are worth $1 billion each while the company currently holds $2.8 billion in cash. Only last week the company appointed new board members on the basis of sales and partnerships in hopes of it taking a U-turn. The hardware unit may decrease further as smartphone seekers hesitate to get their hands on devices that may have a gloomy future. This leaves buyers to concentrate on Blackberry’s other assets.
Market experts think it was not a wise move on the part of the company to put itself for sale. This is going to decrease the business and giving the market the impression that Blackberry is capable of doing anything to alleviate the value and that anything can go as far as splitting up the company. Very few would be interested in getting their hands on the company as a whole.The company has additionally failed to give a comment on a potential sale of the company’s subsidiaries instead of the entire company, making the rumor mill go wild with ideas.
Blackberry faces rejection
Blackberry appointed JPMorgan Chase & Co to analyze its strategic options. Once received with fervor from the tech market, Blackberry smartphones are on the shelves gathering dust as competitors like Apple and Samsung take a much larger bite of the market share. Blackberry was met with rejection especially from private-equity firms when bankers contacted potential bidders. Only last year, International Business Machines Corp (IBM) approached the company’s enterprise service business. IBM was not, however, was not interested in purchasing the whole company.
Android and Apple
The hardware unit which once swallowed a whopping $3.4 million in 2011 now lies in the wilderness alone as most of the tech crowd moves to touchscreeen phones from Samsung and Apple. Customers prefer smartphones with lots of apps that are easy to download and use. The last quarter of 2012 saw Blackberry’s share in the smartphone market falling from 4.9% to 2.9% followed by Microsoft Corp with its Windows Phones. Apple with its iOS and Google with its Android operating system were least affected by a fall in their shares.
Earlier there were whispers around the market that the company might go private so it could go through a revamp or be divided into smaller parts away from the limelight. These speculations paced up after August 12 when the biggest stake holder of the company Prem Watsi announced his resignation from the board. People are now looking at what will be happening to their Blackberry smartphones and wondering whether they too will have to switch soon.
The company’s spokesperson, however, refused to give a comment on the situation while suppositions still float in the air about the company going private.