BlackBerry (NASDAQ:BBRY), in the midst of trying to go private, is hitting back against a recent report from research firm Gartner that warned the company does not have a long-term future.
The Gartner report, released on Friday, was written in response to concerns that clients had expressed about the future of BlackBerry's business. Gartner recommended that companies that use BlackBerry's devices and enterprise services think of contingency plans. "All clients should immediately ensure that they have backup mobile data management plans and are at least testing alternative devices," Gartner analyst Ken Dulaney wrote. "Clients have three to six months to build a strategy." Dulaney said companies should move away from BlackBerry devices.
On Friday, BlackBerry reported a $965 million loss for its most recent quarter, which came a week after the firm said it would cut 4,500 employees, or 40 percent of its workforce. A consortium led by Fairfax Financial Holdings, BlackBerry's largest investor, has signed a letter of intent to take BlackBerry private in a $9 per share deal that values BlackBerry at $4.7 billion. The companies have until Nov. 4 to conduct due diligence and in the meantime BlackBerry can shop for another buyer.
In response to Gartner's report, BlackBerry said in a statement to several news outlets that it believes Gartner's recommendations are premature. "We recognize and respect external parties' opinions on BlackBerry's recent news. However, many of the conclusions by Gartner about the potential impact of a sale or other strategic alternatives, are purely speculative," the company said. "BlackBerry is restructuring and pursuing strategic alternatives to increase its focus on its core enterprise business. We remain steadfast in our mission to deliver the most secure and powerful mobile management solutions and smartphones to our customers."
BlackBerry noted that its BlackBerry Enterprise Service 10 has more than 25,000 commercial and test servers installed to date, up from 19,000 in July. "BES 10 is also the only EMM [Enterprise Mobile Management] platform to be awarded 'Authority to Operate' on U.S. Department of Defense Networks," the firm said. "Everyone at BlackBerry is grateful for the ongoing support of our customers, and we are working harder than ever to keep it."
Despite BlackBerry's attempts to cast a positive light on its situation, many were not convinced. "We doubt a strategic investor will show interest, given the pace of decline in BlackBerry's business," Nomura analyst Stuart Jeffrey said Monday, according to AllThingsD. "With BlackBerry's change in strategy now very public, we believe that operators, distributors, consumers, and enterprise customers and partners will quickly drop their support for BlackBerry and look at alternatives."
Indeed, some analysts think that the $9 per share bid will eventually be lowered as the consortium conducts its diligence. "The bid could be lowered to (approximately) $7 as a last resort," Jefferies analyst Peter Misek said, according to AllThingsD. "We think other bidders will be unlikely."
Meanwhile, BlackBerry said it remains committed to bringing is BlackBerry Messenger chat application to Google's (NASDAQ:GOOG) Android and Apple's (NASDAQ:AAPL) iOS. The rollout was delayed last week after an unreleased version of the Android app leaked online. The company has not provided a timeline for when the cross-platform BBM rollout will happen.
For more:
- see this AllThingsD article
- see this separate AllThingsD article
- see this TechCrunch article
- see this VentureBeat article
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Can BlackBerry survive as a services company? I doubt it.