Developing – Canadian Investment Firm Offers to Purchase Blackberry

The consortium has offered $4.7B dollars for the once dominant smartphone manufacturer

blackberry_logoTo be honest with everyone, this one took me by surprise. If you didn’t know Blackberry was looking for a buyer, you were likely living under a rock. I thought this might come eventually, but not as quickly as it did.

This story is developing, so you should watch Soft32 for updates to this over the next few days. I’ll try to have something on this as developments occur. In short, though, a consortium, led by Canada’s Fairfax Financial Holdings, has offered $4.7B in cash for the once dominant smartphone manufacturer. The deal is supported by Blackberry’s Board of Directors. (honestly, I’d be surprised if it wasn’t).

Fairfax is said to currently own 10% of Blackberry now. Their all cash offer would acquire the remaining 90% of outstanding shares at $9 per share. When the offer was announced, BBRY was trading at about 8.25. The company’s stock closed at 8.76, after peaking at 9.01.

The deal, outlined in a letter of intent, gives Fairfax and Blackberry until 2013-11-04 to complete Due Diligence. During this time, Blackberry can continue to shop the company for a better offer.

Blackberry has decided to abandon their pursuit of the consumer market and will instead concentrate on the enterprise. However, this won’t save the currently 4500 employees worldwide that are currently targeted in a downsizing. In foregoing the consumer market and concentrating on the enterprise, its thought that Blackberry can retain what value it currently has, despite its $1B charge against unsold Z10 smartphones and a drop to number 4, behind Windows Phone, in the smartphone market.

We’ll have to wait and see.

This story is currently developing and I’ll have more on this as the facts come to light. I’ll also have some personal insight after I have a chance to digest all of the facts. As it stands, there’s a lot going on here, and the entire tale has yet to be told.

Stay tuned to Soft32 for more.

I have a concern about this, as it seems like a little too late to make much of a difference…

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Apple’s Low Cost iPhone – Good or Bad Idea?

Apple LogoBelieve it or not, this isn’t as slam dunk as you might think it is…

Emerging markets are a big deal.

In areas like China, Korea, parts of Africa, etc., where there are untapped consumers just waiting to buy a smartphone, the right device at the right price can sell and sell very well. Low cost, low margin phones are intended to make money in volume sales.

According to an article published on TUAW, former Apple CEO John Sculley agrees that Apple needs to produce the low cost device, which for many in those markets, is the only computing device they will own. While Sculley acknowledges that there’s “nothing wrong” with the current iPhone, he also acknowledged that Samsung is very good at what they do, and implied that Apple needs to figure it out and provide a competing product.

Sculley agreed that Tim Cook is the right person to lead Apple at this time due to his operations experience. Apple’s decision to cut its product update cycles to 6 months instead of 12 will require solid supply chain experience, and that’s right up Cook’s alley.

While its still unknown if a low cost iPhone would make an appearance in either the US or Europe, there seems to be a shift in thought in the smartphone arena. Lower cost, unsubsidized devices seem to be the direction that the world wants the industry to go. That being the case, I suspect that we’re going to see a number of exciting changes over the next year or so.

Whether or not a low cost iPhone is a good or bad idea is going to be validated by Apple’s financial and stock performance. The markets seem very fickle right now, with Apple stock jumping 3-5% over the past couple of days on news of component order cancellations and their 2013 product pipeline, respectively. Until the world decides that Apple knows what it wants to be when it grows up, I’d expect a great deal of fluctuation in their stock price and speculation in the news regarding the company’s viability in a post-Jobs era.

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