Ovum analyst downbeat on BlackBerry sale

Ovum’s chief telecoms analyst says a sale of BlackBerry to Fairfax Financial won’t solve underlying problems at the Canadian vendor.
BlackBerry’s bosses have signed a letter of intent to sell to a consortium headed by its leading shareholder, after accepting a $4.7 billion (€3.4 billion) offer. However, Ovum’s Jan Dawson believes the sale and subsequent delisting of the vendor will do little to address plummeting device sales, and that a decision to focus solely on business users signals the beginning of the end of the firm.
“[T]he company’s device sales are cratering, and its announcement last week that it no longer intends to pursue the consumer market is essentially the death knell for this business,” Dawson states.
BlackBerry chiefs signaled a desire to keep the company intact earlier this week in a profit warning for the firm’s current fiscal quarter. Previously shareholders had called for BlackBerry to be broken up and sold, however Dawson notes other business units rely heavily on the firm’s handsets for their success, meaning any scaling back or exit of that market will have a knock-on effect.
“BlackBerry Messenger’s installed base is entirely on BlackBerry devices, and its launch on iOS and Android was aborted over the weekend. Its mobile device management business is entirely based on its ability to manage BlackBerry devices, and its cross-platform management is much less well established than those of major competitors like MobileIron and Airwatch.
“If you strip out BlackBerry’s use of its QNX operating system for BlackBerry devices, you’re left with a business that’s worth less than $100 million.”
Fairfax Financial’s aim to take BlackBerry private is also criticized by Dawson. “Normally, companies are taken private in order to give a long term strategy time to payoff without the hassles of short-term investor scrutiny. But BlackBerry’s key problem for the last couple of years has been the lack of such a long-term strategy,” he notes, adding. “Unless Fairfax plans to radically change or accelerate BlackBerry’s strategy, it’s unlikely to be able to turn the company around.”