Blackberry Shops the Company – Too Little Too Late?

Trading was briefly halted this morning, so an emergency strategy meeting could take place.

BB Stock-01BB Stock-02

I’ve been talking about the demise of RIM – now called Blackberry Corporation – for quite some time now.  In fact, if you recall, I called this over a year ago.  Blackberry was in trouble then; and quite honestly, nothing that they’ve done has had the force or power to turn the ship around. They’ve got an arduous decision in front of them.

Steve Ranger from ZDNet had an interesting column with 5 different suggestions for the company. I’m obviously not going to regurgitate what he said, but I do have my own take on most of these. I’ll make it brief; but I’m putting on my thunderwear for this. The time for candy coating everything is long gone.
According to Steve, Blackberry can:

  • Form partnerships
  • Go Private
  • Shop and Eventually Sell the Company
  • Break Up
  • Do Nothing

Form Partnerships
Whether on a client-by-client basis or with a larger player, RIM could seek out potential hardware partners like Samsung, HTC (a personal favorite of mine in this scenario), Microsoft or Apple. There are pros and cons to all of them

If I were Samsung, Apple or Microsoft, I’d pass on the partnership deal. Blackberry has too much going against it right now to attract any of these larger players as a partner, though Apple might want to partner with them to handle sync solutions for PIM data that might be integratable into a point release of OS X Mavericks and iOS 7 or later. If I were Samsung or MS, I’d look to acquire the company outright, which MS has tried to do on more than one occasion. Blackberry was never too keen on.  Big mistake on their part at this point, I think…

HTC could be the best choice of a partner, as they need something to help pull them out of the deep end of the pool.  They are also the potential partner that is likely to take the most risks and be the most flexible. Neither Samsung, Apple nor Microsoft NEEDS anything right now.  They’d probably take a majority share and just tell Blackberry to shut up and sit there… I would if I were any of those three.

Go Private
Without a major revamp in strategy, the company doesn’t have a snowball’s chance of surviving. They’re profitable, but only for as long as they can convince customers to keep buying their services. Eventually, they’re going to run out of steam. It’s just a matter of time.

Going private isn’t an option without a huge strategic shift. Blackberry hasn’t shown the potential to do this in the past 5 years. If they can do it now, I’d call for the removal of Thorsten Heinz. A strategic shift of that magnitude should have been done in the 2008/2009 time frame. No excuses…

Shop and Sell the Company
If I were MS, I’d adjust their last offer for stock price and try one last time. They have the cash, and Blackberry really can’t turn down any serious offer at this point.  I would also bid for the whole damn thing, too. Thorsten Heinz has turned his nose up at Ballmer twice since 2008, but a melding between Microsoft and Blackberry could do a lot for Windows Phone and could give it a huge boost.

As I mentioned, Samsung and Apple could and probably should also bid for the assets, including the IP that may still provide income. Blackberry’s future may not be bright, but there something there that may be of value to a larger mobile player.

Break Up
As I just said, their IP and other assets have some value. This is a real option for them. Their stock price as of 1130am Central Time as 10.25, up nearly a 1/2; but it had 6.6x that value in February 2011, just over 2 years ago.

Breaking up should be considered a last resort, if they can’t get any real cash in either the partnership or sell categories. The assets are likely to get spread around to too many companies, and then the value is greatly reduced

Do Nothing
This is clearly not an option. Heinz was brought in to turn around the company after its co-CEO’s did nothing and nearly ruined the company.

You don’t’ just halt trading on a publicly traded company. Something serious is up; and while there haven’t been any major announcements made on the results that I can see, its clear Blackberry’s time is almost up. Back in 2008, it thought Microsoft’s bid of $50 per share undervalued the company. They’ll be lucky to get 12 or 15 at this point, let alone 20-25 (which would be half the original bid).

I think the time has come. Heinz gave it a good go; but he hasn’t done anything to successfully turn the company around; and unfortunately, BB10, Blackberry’s new mobile operating system hasn’t seen any notable success.

The writing’s on the wall, we’ll miss Blackberry…maybe.

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Navigating the Mobile Landscape: Ecosystems – #3: Where the Heck is Microsoft?

In the Navigating the Mobile Landscape: Ecosystems #1 and Navigating the Mobile Landscape: Ecosystems #2 we’ve been talking about why Ecosystems and mobile devices. The big question that many of you are probably asking is, “Ok… so what’s the big deal? Why do I care about this? We’ve been through Amazon and Google pretty thoroughly.

The one remaining player, Microsoft, has been pretty much out of pocket on all of this. Let’s briefly talk about why.

Bringing it all Together – Where the Heck is Microsoft?
Over the past few years, Microsoft has really struggled with mobility. Quite frankly, it doesn’t know its own butt from a mobile hole in the ground. Its pathetically sad, really. They had this market sown up and they let it slip away from them. Ballmer is a huge part of this problematic equation for Microsoft. He just doesn’t get mobile computing.

When Microsoft introduced Exchange ActiveSync with Exchange Server 2003, as a directed salvo aimed directly at RIM and Blackberry Information Server and Blackberry Enterprise Server, it did more than just hit RIM where it counted the most (in their wallet), it actually won the ecosystem war, really before it started, and didn’t know it.

Exchange ActiveSync (the PIM synching FOUNDATION of the ecosystem) did what BIS/BES did for Blackberry, it did it for all Windows Mobile based devices, and it did it for free, totally undercutting RIM’s revenue model. Today, RIM finds itself nearly unable to recover from this 8 year old wound. To add salt to it, Microsoft has licensed the basics of Exchange ActiveSync to both Apple and Google, bringing push to the iPhone and to every Android device, literally, everywhere.

As for the rest of the ecosystem – music, multimedia, ebooks, pictures etc. – Microsoft sorta had that in place with the Zune and the Zune Marketplace, but killed the Zune a couple years ago. The Zune Marketplace has struggled for any kind of identity since. Microsoft hasn’t cultivated new or tended any existing content distribution agreements that I’m aware of.

Further, Microsoft also killed Windows Mobile in favor of Windows Phone. The platform may be superior to its predecessors from a developer’s point of view, but Windows Phone has failed to gain any real traction with consumers since its introduction. While Microsoft and Nokia have partnered to introduce new hardware on MS’ updated Mango release of the platform, its largely seen as a last ditch effort to save both companies.

As far as a tablet is concerned, Microsoft just can’t seem to get past the, “put the whole OS on a mobile device” stance. No one wants a full blown version of Windows 7 or Windows 8 with its strange metro UI on a tablet. Consumers are telling manufacturers they truly want a companion device, not one device to rule them all, and Microsoft simply isn’t listening.

The best thing that Microsoft can do for itself is:

  • Ditch Windows 7/8 on a tablet and pull together a version of Windows Phone that will work on a tablet styled/sized device
  • Breathe some life into the Zune Marketplace for music, movies and TV shows. Insure that multimedia store apps are tightly integrated into Windows Phone and Windows Tablet (a working name, for lack of any other)
  • Adopt an ereader app and format as its designated platform and go with it. It doesn’t matter what format they choose, but they need to pick on and promote the hell out of it. Please don’t reinvent the wheel or try to bring back Microsoft Reader. It died a long time ago and we don’t need to splinter the ebook market any further
  • Develop Windows Live Essentials components for Windows Phone and Windows Tablet. They also need to update Windows Live Essentials for desktop Windows to include the sync support for WLE.
  • Give the sh…, uh, I mean stuff… Give the stuff away. Off branded Android tablets are doing well because they’re part of the Android ecosystem; but they’re cheap. The HP Touchpad sold well in the Fire Sale because it will make a GREAT Android tablet and again, they were cheap. Microsoft doesn’t have the luxury of brand or eliteism like Apple does. It doesn’t have the install base like Google’s Android does. It needs to get into the market and saturate it – Buy a Windows Phone, get a Windows Tablet, and vice-versa. That kind of thing. If it doesn’t do this, it may as well not even try. All they’re going to do is create a huge charge and/or write off for the company and their stockholders

Based on all of this, what should you get your loved ones for the Holidays? Come back next time, and we’ll start talking about that.

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Navigating the Mobile Landscape: Ecosystems #2

In the Navigating the Mobile Landscape: Ecosystems #1 article we’ve been talking about why Ecosystems and mobile devices.  The big question that many of you are probably asking is, “ok… so what’s the big deal?  Why do I care about this? What differences does it make if my gadget of choice is part of any kind of an ecosystem?” It’s a good question.  And actually, it’s something that I know many pundits and marketing mavens have been tossing around. Most people, the pundits and mavens included, don’t completely get it.

Let’s break it all down…

Why an Ecosystem Matters at All
Mobile devices that do nothing more than PIM and Sync Services are equivalent to PDA’s of unconnected times past (think back to 2002-2005 and Compaq/HP’s iPAQ line of personal organizers) or are equivalent to one of RIM’s various Blackberries.  While that may not be too bad in some people’s eyes, think about the issues that are currently plaguing RIM, connectivity and outdated architecture aside.

As you may recall, we briefly touched on an ecosystem containing the following:

  1. PIM,
  2. Sync Services
  3. Purchasing Options & Methods for
  • Multimedia Content

– Music,
– Movies,
– TV Shows, etc.

  • Apps
  • eBooks
  • Pictures
  • etc.,

While the PIM and Sync Services are common to all mobile devices today, let’s consider the Apple model again, as we examine the above list.  What’s common to everything in that list..?  Simply put – iTunes.

iTunes manages the PIM data and sync services. It provides a purchasing and organization method for all consumer content. Apple also provides tools to help developers create content and register it with iTunes so it can be sold. This ecosystem is so simple to work with many developers can top 6-figure revenue marks in under 12 months, given the right product subject matter and type. This “no-brainer” product development model saw many developers leaving other, well established SDK’s for iOS development over the past few years.

But that’s been Apple’s model – build the complete solution, for consumers as well as developers – make it easy for them to live within the defined boundaries [of the ecosystem] and they will come. As I mentioned before, this is where the real money is, not in the hardware. Compatible hardware is simply enables the sale of consumer content.

What Amazon Did
Amazon did something similar, but they are trying to emulate, to an extent, what Apple has created by plugging the holes Google left in the ecosystem they created.  Google has the PIM and Sync Services; but doesn’t really have a trusted way to sell consumer content.  Amazon has had a way to sell music for years.  They have recently created a way to sell Android Apps. They’ve recently created a way to provide streaming movies and TV shows (via Amazon Prime). Their Kindle software provides a way to read and purchase eBooks.

I’ve been saying this for years – Amazon should concentrate on the sale of consumer content, not on selling hardware – to make their mark.  They actually did better than that, as the Kindle Fire is now poised to take the number 2 sales spot in the tablet market, but NOT because of the hardware. The Kindle Fire may take that spot due to the hardware sales, but it’s got the sales because of the kinds of content it supports, and what users can do with the device.

What Google Didn’t Do
Google may have a flagship phone in the Galaxy Nexus, but Samsung controls it; and they haven’t really enabled the new OS to do anything more than any other Android smartphone. Google doesn’t want to provide any type of specific experience, or control how you experience Android. They’ve built openness into the platform and have only recently chosen to address some of the holes with updates to Google Books, Google Music, etc.

What they haven’t done, though, is truly created the framework of the ecosystem for all of the OEM’s making and selling hardware. As such, there are a number of different launchers, like TouchWiz from Samsung and SenseUI from HTC. There are a number of different Android builds built into a number of different formats from tablets to smartphones to e-readers. The level of fragmentation that they have allowed by permitting OEM’s to choose from 5 different OS revisions (Éclair, FroYo, Gingerbread, Honeycomb and Ice Cream Sandwich) and their acknowledgement of their lack of revision control is staggering. By permitting 5 different OS revisions to be actively used at the same time, creates a great deal of variation and compatibility issues with applications in the Android Market.

While they may have the lion share of the handheld market, Google’s Android is floundering, struggling for direction. It needs Google to step up and define that direction in order to bring solidity and stability to the platform. If they truly want to beat Apple at their own game, this is what they need to do. Period.

Come back next time, and we’ll try to figure out where the heck Microsoft is in all of this.

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