Blackberry Ceases Phone Manufacturing

The only thing that I’m wondering, is why it took so long…

BlackBerry logo

Over the past five years, I’ve been very bearish on Blackberry and RIM. I’ve covered this extensively when I was Managing Editor at BYTE, the reincarnation of BYTE Magazine. Here’s a quick sample:

I have also covered this topic somewhat on

  • There was no 3rd Party Developer support
  • No available apps
  • No software store
  • No eco system
  • No way to manage, play or obtain digital content

However, I don’t want to spend the next 300 or so words harping on or reiterating what I’ve been saying for the past four to five years. Instead, I want to talk about what Blackberry has to offer the market now:

A fire sale on used office furniture…

If Blackberry is no longer making phones, their mantra of, “the world wants our devices and services because they love our keyboards,” isn’t true. No one seems to care or give a hoot about their keyboards. If they did, then they would have flocked to those devices and the iPhone or the latest Android device wouldn’t be as popular as those devices are.

The truth is no one gives a rat’s patootie about a physical keyboard in 2016. It’s all about apps and a functioning ecosystem, and Blackberry doesn’t have one. So what do they have..??

Messaging services.

Messaging services… which are no longer driving the industry. Messaging services… which now have a number of non-proprietary alternatives which don’t cost an arm and a leg. Messaging services… which now don’t require dedicated hardware or a certified, dedicated IT resource to manage. Messaging services… which now have other encrypted alternatives like Apple’s iMessage or Facebook’s WhatsApp. Messaging services… which at last examination, still ran through a centralized hub in Toronto, and were subject to outages if the messaging network were compromised or was negatively impacted by some kind of hardware failure or internet service interruption.

So yeah… if some, part or all of the above is true, just WHAT does Blackberry have to offer the world..?? As I said – a fire sale on used office furniture.

In truth, Blackberry has very little to offer anyone at this point. Now that their hardware is gone, the only thing they have left is their messaging services and software products, and I have NO idea who would really be interested in those.

While thinking about that point, I immediately went to folks like a state government or the Federal Government; but they can make use of existing mail server platforms like Exchange for email and use, for example, WhatsApp, to send and receive secure messages (though I doubt that the FBI, CIA or NSA will actually USE WhatsApp…). Some may argue, that there isn’t even a need for secure messaging in Washington DC; but I digress… My point is there are cheap, affordable alternatives to Blackberry’s software offerings, on platforms with hardware people actually want to use.

Blackberry’s business plan options now are bleak. According to an article by Roger Cheng, of C|NET and published on MSN Money,

“Even BlackBerry’s final Hail Mary, its embrace of the Android operating system, was the brainchild of veteran phone executive Ron Louks. He assumed that wider access to Android apps, combined with its reputation for security, would turn some heads in the corporate world. It did not. The first Android-powered phone, the BlackBerry Priv, was a high-end premium device that landed with a thud… Louks left BlackBerry in May.

…[Blackberry’s CEO, John] Chen believes BlackBerry will live on, but focused solely on software.”

Software that no one is really going to want…

The world has moved on from Blackberry. Blackberry is a messaging dinosaur that had is day and was driven out to extinction by the meteor that is the both the iPhone and is every Android device…ever. The enterprise has moved on to messaging alternatives that more easily allowed IT mail administrators to manage any device that every Tom, Dick and Harry brought to the office via their company’s BYOD initiative.

The big problem here is that Blackberry is dead. The world – including me – has been predicting and foretelling the world of its demise over the past four to five years. It really seems as though John Chen is the ONLY person in the world that either didn’t get the news or completely ignored it.

It just seems a little silly, really.

If you have Blackberry stock, now is the time to dump it before the fire sale begins; because when that starts… it will already be too late. I don’t know what kind of real value Blackberry intellectual property really has right now, or whom would want to purchase it.

As of this writing, Blackberry’s stock (NASDAQ: BBRY) was at 8.29, down 0.04. Its high over the past year was 9.42, back near the beginning of 2016. It’s all time high was 138.87 near December of 2008. Looking at those graphs, the stock seems to be on life support at best.

The party is clearly over. It’s just the host that doesn’t seem to know…

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Fairfax Deal Falls Through – Blackberry on the Skids?

Sometimes I really hate it when I’m right…

The clock has been ticking for Blackberry for quite some time, and today, the alarm went off. You know, I really feel bad. I really do. I hate it when I’m right, but some things really just can’t be helped.

I’ve been down on RIM/Blackberry for quite some time. I’ve been calling for them to see the writing on the wall since late 2011. Its seems now, they actually do know “for whom the bell tolls.” This time, it tolls for Thorsten Heins as Blackberry ousts not only him, but many of its senior directors as well in a last ditch effort to salvage some value out of the organization before it’s too late.

The buy-out by Fairfax Financial isn’t going to take place, and that’s really too bad. It was, in my opinion, Blackberry’s last, real chance to maintain any of its identity. Instead of the buyout, which would have been a nearly $5.0B deal, Fairfax is going to try to raise about $1.0B by selling convertible notes in a bid to stabilize the organizations shrinking operating capital. Recently, the company reported a quarterly loss of about $1.0B and burned through an additional $500M in cash.

Sybase’s former chairman and chief executive of its enterprise technology firm, John Chen, will take over as CEO and as chairman of its board. Fairfax’s CEO, Prem Watsa will act as lead director and the chair of Blackberry’s compensation committee. There are specific, unspecified conditions that must also be met for the deal to close, which also includes approval from the Toronto Stock Exchange.

Trading of Blackberry shares was briefly halted, prior to the Nasdaq actually opening, as they lost nearly 21% in premarket trading. As of 2 PM EST, BBRY shares were still down 1.28 to 6.49.

wake up blackberry

After the operating capital is secured, I’m not certain what Blackberry’s Plan B moves are. However, if they’re smart, those moves should include finding some kind of buyer for their IP before it becomes completely irrelevant. Blackberry’s security technology is great for mobile email, but many of its current customers are moving to other solutions as they weren’t able to make their latest OS gain any traction with the consumer market and have only had mild success in the enterprise market. Divesting the organization’s assets seems the only real alternative for them to get any return on their investor’s money… before the world completely moves on.

 

I’ll be following this in the coming days and weeks to see if and what John Chen decides to do with the organization. Please watch Soft32.com for updates.

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Blackberry Considering Break-Off of BBM to its Own Subsidiary

Is Blackberry Messenger (BBM) a sustainable asset for Blackberry, Inc.? Not to be a naysayer, but…

I’m a huge fan of Tech News Today. The TWiT Network provides a lot of valuable podcasts and live round table technology shows, and yes… I’m hooked. I was listening to Episode 826 – The Promised Fridge, and Tom, Iyaz and Sarah started talking about how Blackberry – formerly RIM – was considering a spin-off of their Blackberry Messenger (BBM) product into its own subsidiary. Many of them saw possibilities in it. I think it’s a whacked idea and doomed to failure. Here’s why.

Back in its prime, BBM was one of the biggest draws for new users to the Blackberry smartphone. You could send instant messages to any other Blackberry user anywhere, on any other domain or BIS/BES server that also supported BBM; and that’s where the value ends.

bbm

Blackberry is seriously considering bringing BBM to other platforms, giving users the opportunity to trade messages with users on other platforms like iOS and Android. Unfortunately, the value in that decision is coming about 5 to 7 years too late… much like everything else the Toronto, Canada organization has decided to do.

Unfortunately, BBM is much like What’sApp, Skype, Facebook Messenger, Line and Viber. All of these apps are already cross platform and have wide user bases. They already provide the same level of functionality – and value – that BBM provides, except perhaps, security.

In the wake of the NSA and Snowden scandals, the public has become more aware of the need for privacy and security in their communications. Even if all you’re doing is chatting with friends about what the kids did after school or the latest posting on Facebook, no one likes the idea of having their privacy invaded.

As such many are looking at secure messaging options; and if BBM can offer that to cross platform users, then there’s its market. If it can’t, then it has no market, as their app and platform is just another me-too, late-to-the-game offering in a very crowded market.

Unfortunately, this seems to be part for the Blackberry course. They should have started looking for a buyer for the company 2-4 years ago when its assets still had some serious value. Now because they’ve asserted their patents and required competitors like Microsoft and Google to find another method to provide Push notifications and mail – with device management services – as well as independent messaging services (Apple’s iMessage platform is very similar to BBM, by the way), the only value that the company has is its patent portfolio.

I also have very serious doubts as to the TRUE value of it, too. As I said, RIM, now Blackberry, forced both Microsoft and Google to find different ways to provide Push services. As such, Blackberry’s technology while still very popular, is outdated technology and is quickly losing not only relevance, but the value of its exclusivity. BBM’s value is tied to the secured server technology that everyone has already worked around.

This, like most of what Blackberry has been doing, is too little, too late, and so very unfortunate.

 

What do you think? Am I totally off my nut, or am I dead-on? Why don’t you let us know your thoughts in the comments, below.

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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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RIM Keeps Manufacturing Out of China

This one act has probably done more to show the world that RIM is in it to win it than any other so far this year – RIM is staying out of China.

The Huffington Post had a really great article in it yesterday. The article described how Thorsten Heins, RIM’s CEO, has made an operational decision to stay out of China. Specifically speaking, despite the cheap labor and lax environmental laws, RIM’s manufacturing operations won’t be moving there… ever.

The immediate question is, “why is this important?” That’s really quite simple. Historically, it’s been very easy for Chinese companies to “acquire” intellectual property and produce like and/or competing products and services from companies operating within their borders. In many cases, government officials order, intimidate, cajole, or otherwise “make” Chinese workers cough up the information.

Shortly after that happens it’s not been unheard of for foreign companies to lose or be underbid for work because a Chinese organization introduces a like product and wins a contract or business with that illicitly gained information. This is a well-known occurrence for organizations with operations in China.

RIM is in butt-saving mode. Its cutting staff, cutting costs etc., trying to insure that it has enough staying power to release BB10 and the new devices that run it. The one thing it won’t be doing to save money on manufacturing costs.. ? Moving its manufacturing operations to China.

This is huge step in the right direction for RIM; and it may be the first thing they’ve done right this year. This decision protects RIM’s reputation, RIM’s current product line and most importantly, RIM’s customers from rogue Chinese government sponsored hackers running amok through RIM’s enterprise, or YOUR enterprise because the Chinese were able to hack through BIS/BES. It protects RIM’s most valuable asset – its security features. It also protects RIM’s value

Despite the fact that RIM could have saved a great deal of money on operating expenses, Heins has likely saved the company by keeping the company out of China.

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RIM’s Impending Collapse – Sometimes I Hate it When I’m Right

With its stock at an all time low, the Ontario-based company has retained JP Morgan-Chase to help it evaluate its options

Sometimes I really hate it when I’m right. I really do…

Late last year, I pumped out a couple columns on why I thought 2012 was going to be a very, VERY difficult year for RIM. They’ve got a huge set of hurdles to overcome. With layoffs likely to happen at any time between now and the end of the year, employees who aren’t actively looking for new employment are likely setting themselves up for huge problems later on. When a company is tanking, its always better to leave earlier rather than later in my opinion.

Be that as it may, about a week ago, it was reported on Wall Street that RIM has retained JP Morgan-Chase to help it figure out what to do with itself. There’s really only one reason why RIM would hire an investment bank the likes of JP Morgan-Chase – they’re actively looking to shop the company, wanting to identify a buyer sooner rather than later while the company’s stock and assets still have value.

I saw an article on Seeking Alpha that identified three real world players to purchase all or part of RIM or its patent portfolio: Microsoft, Google or Apple. The article’s author, identified only as “kracken,” is correct. There are only three. Some people may wonder about companies like Nokia, Samsung, LG and HTC. The fit isn’t right there.

Nokia, Samsung, LG and HTC are handset makers that play in ecosystems created by Microsoft (Windows Phone), Google (Android) and Apple (iOS). For Nokia, Samsung and the rest to make a play for RIM would mean that they would be interested in throwing considerable capital behind the continuation and evolution of BB10/QNX, and the rest of RIM’s ecosystem, which includes the pitifully received Blackberry Playbook. Even though version 2.0 of the tablet’s OS was fairly well received, its highly unlikely to make an appearance ANYWHERE with any kind of impact that would make it worthwhile to have.

RIM currently has $2.1B in cash and over 78M known Blackberry users worldwide. However, only 20M of those are enterprise level users. With 58M consumer-based users that could jump off the RIM ecosystem for a more viable one in MS, Google or Apple, its clear where RIM’s current value currently lies – its patents.

With Google’s recent acquisition of Motorola Mobility recently completed, its unlikely that regulators would approve the additional acquisition of a set of patents that would likely, and most certainly, create a near total monopoly for Google in the mobility space.

Microsoft is perhaps the second most likely candidate in the list of three, some may think.. As a former, direct RIM opponent in the Push eMail space, it would be very ironic for MS to acquire the RIM Push mail patents (as well as others) when, during the 2002-2004 timeframe, if memory serves correctly, RIM brought litigation against Microsoft for the way Exchange ActiveSync pushed mail and notifications out to a connected device. MS had to change the way Exchange ActiveSync worked, much to the dislike of many. Acquiring the patent would certainly close the loop for MS is that story, but with Microsoft’s flat stock performance over the last 10 or so years, I’m not entirely certain what the acquisition would truly buy them other than a sense of vindication. They’ve already “won the war,” especially if they do, in fact, end up taking 20 or so percent of the mobile market by 2016, as predicted by some analysts. Apple and Google already license Exchange ActiveSync as the back end of both’s abilities to sync with Exchange Servers for mail services. There’s no reason for them to purchase patents for a competing push service when no one else is likely to use it.

From my perspective, the only reason why MS would buy them would be to kill them.

Come back next time, and I’ll finish up the analysis…

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HP & WebOS – What does its Loss mean, really?

In a mobile world currently dominated by iOS and Android, does the loss and then open sourcing of WebOS really matter?

I’ve been in mobile devices most of my career. I cut my teeth on them. I’ve watched some devices and operating systems grow up, grow old and die. PalmOS, WindowsCE and Windows Mobile are a few. WinMo was killed for Windows Phone, and its totally different.

WebOS with its cards motif was a big step forward and a huge step away from Palm’s traditional PalmOS. The hardware was ok, the OS was pretty good; but Palm lost their momentum and wasn’t able to turn it around.

Palm mothballed the OS and sold it to HP. HP promised to do something with it, but they couldn’t get it together either. They initially decided to let the OS die, but later decided to revive it and open source it. Its been a number of weeks since that announcement. I can’t help but wonder what the impact of that development means at this time.

In a word or two…not much.

HP’s official development and work with WebOS has ended. They’ve given the software to the development community to tweak and use as they like. Right now, there aren’t any CURRENT devices using the open sourced (or any) version of WebOS. Unless a major hardware manufacturer or OEM decides to go that way, you likely won’t see it, either.

So again, what does that mean? Will it make a difference in an iOS and Android dominated market?

I don’t think so. The iPhone is the iPhone and will continue to grow in popularity all over the world. Android will continue in current and new devices, and be as diverse as the day is long. Windows Phone will continue to chip away at both; and RIM will likely disappear,  regardless of what WebOS does or doesn’t do.

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RIM turned down acquisitions overtures from Amazon, Microsoft AND Nokia?

RIM is headed for a very difficult 2012. It seems that it can’t even GIVE it away…

Case in point – RIM has been a huge player in the PDA/Smartphone market for more than 10 years. Its closer to 15, really; but not quite. Anyway, in 2011, it was stated that RIM’s stock lost 75% of their value, and while that loss still leaves them with well over $1.7B in cash, it’s not clear how long that cash will last when they are constantly losing market share to both Apple and Google’s Android. Big decisions need to be made, and made quickly.

One thing is very clear, however – RIM needs to get their act together…quickly.

One thing that really puzzles me is that RIM has turned down acquisition overtures from a number of really big players in the tablet and smartphone markets, including both Amazon and Nokia. They seem to have scared off Microsoft and their interest in the Ontario handset manufacturer more than once. They also don’t seem to care. Their co-CEO’s appear hell bent on trying to right the company. While I applaud them for their tenacity, they really just need to knock it off. The party’s over.

Not only is the party over, but the the BGR reported rumor that sparked a 7% uptick in the company’s stock on 17-Jan-12, has been emphatically denied by Samsung. They have CLEARLY stated they have NO interest in RIM, and have never considered or formally discussed any interest in them. At this point, I not only expect the market to give back yesterday’s ample gains, but for the company to lose additional value in the immediate future’s trading.

Nearly every industry pundit that I know of is predicting RIM’s future to be dismal at best. C|Net’s Buzz Out Loud podcast recent 2012 Prediction’s Show also spelled out a bleak to dismal 2012 for the once dominant RIM.

Everyone else can see it…why can’t they?

Any way you try to look at this, RIM needs to act, and act now if they are going to do save something, anything of themselves. The company lost 75% of its value in 2011…75%! It can’t stand to have that happened again. If their board is paying attention, much of the tech industry is chiming in on their rather pronounced misfortune, and they are making provision for that continued misfortune. Unfortunately, most everyone thinks we are past the water bailing point. According to the industry, the ship is going to sink. It’s just a matter of time, and it’s just a matter of determining how much value for their shareholders can be saved.

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