BlackBerry’s Strategic Alternatives: A Joint Venture, Partnership, a Sale, or else?
According to recent news, Canadian smartphone maker BlackBerry has set up a committee to look at “strategic alternatives”, including possible joint ventures, partnerships or a sale of the company. As a result, the stock price rose of BlackBerry which has been struggling to compete in a saturated market of smartphones.
Timothy Dattels who is chairing the committee accompanied by BlackBerry’s CEO Thorsten Heins was quoted on Monday (August, 12th, 13), “Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives”.
History repeats itself. We had witnessed such conditions for the large companies (once market leaders) in the past. The companies, that are unable to foresee and innovate, have suffered decline. According to comScore in 2010, BlackBerry was the leading mobile smartphone platform in the US with 37.3 percent of total share of smartphone subscribers. In 2012, the market share of BlackBerry in US dropped to 7.3 percent. This decline resulted due to highly innovative smartphones offered by Apple and Android based smartphones such as Samsung and others.
The loss of market share led to various changes in the company’s leadership including Jim Balsillie and Mike Lazaridis (founder of BlackBerry) who both stepped down as CEOs and were replaced by Thorsten Heins (the current CEO). Under Heins’ leadership, BlackBerry announced an initiative (in the First Quarter results reported on June 28, 2012) “a planned workforce reduction of 5, 000 by the end of its fiscal 2013, as part of a $1 billion dollar cost savings“.
BlackBerry also released it’s much anticipated BlackBerry Z10 and Q10 earlier this year. Despite the high hopes associated with these models, these smartphones were unable to impress the consumers. Many former customers of BlackBerry had already switched to other smartphones and will not be returning regardless of the new releases. The analysts cited that innovations with operating system 10 (used in Z10 & Q10) were good but not as revolutionary as compared to the current competition in the market.
At this critical juncture, when the smartphone market is saturated and BlackBerry is not able to regain it’s market share, it’s no secret that BlackBerry’s fate may lie with another partner. Could a partner such as Microsoft Corp, Lenovo Group Ltd or any other be the survivors for BlackBerry? If BlackBerry fails to do so, the corporation may be examined as a case similar to Wang Computers and Pan Am who were unable to foresee the market trends and respond timely.
I am curious to understand your perspective. Please share your insight, thoughts, and opinions.