I think more than 50% of the headlines on HN are misleading and sensationalist. Nobody would want to most the puff pieces here if they had honest titles.
Whenever they say that, they mean "sale." It's typical BigCo doublespeak. In their minds, they're trying to convey the impression that they have choices, so that when they negotiate the sale they don't have their backs up against the wall. But everyone knows it means "sale."
> These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions.
I think the most likely endgame is that they'll pull a Nokia: either an outright MSFT purchase or becoming a heavily-subsidized client state.
* Microsoft still has plenty of cash, but is facing an existential crisis of losing platform relevance
* Their overall mobile marketshare is so low that they can probably throw that cash around with much antitrust attention
* They've had a hard time attracting hardware makers other than Nokia. If Nokia stumbles further, the whole phone platform could unravel.
* The traditional Blackberry market was enterprises, who probably would be a lot more receptive to the "windows everywhere" story than Nokia's customers ever were. Blackberry's original killer feature was arguably MS Exchange integration.
I highly doubt that MS will be the party to bite. BB uses a customized QnX that is about as far away from Windows Phone as you could probably go without doing something really exotic.
If that were their route they'd have to drop their investment in QnX, try to adapt all BB software to run under the latest incarnation of Windows Phone rather than to just run Windows Phone on it. BB users are quite particular about their handsets & associated software, much more so than Nokia users ever were.
Of course this could be totally wrong but I think the challenges in moving BB to Windows Phone are far more substantial than to get Nokia to convert even if BB is a smaller player.
> If that were their route they'd have to drop their investment in QnX
Just as Nokia had to drop their investment in Symbian and Maemo
> BB users are quite particular about their handsets
However they're not particular about BB10 (the QNX one you mention) since most of them aren't even running it. If anything, the fact that they're in the middle of a delicate platform shift makes the parallels with Nokia in 2011 all the more striking.
That's a good point. Ok, so maybe MS would be the one to bite. If only to beat out a potential competitor to windows phone and to pick up that slice of the market.
Consider me convinced, that might just work out well for them, if they're going to switch anyway it might as well be to a company that is already well represented in the enterprise. How they're going to give those users the blackberry experience is beyond me though, but that would probably not stop an acquisition.
Nokia is getting $250 million each quarter from Microsoft, minus the price of the OS licenses, minus the foregone revenue from supplying Nokia Maps for free to non-Nokia Windows Phones.
With 7.4 million Lumias sold last quarter, at $25 per Windows Phone license, Nokia is drawing just $70 million each quarter from Microsoft. At 10 million units, they'd start paying Microsoft money.
Blackberry sold 6.8 million units last quarter. They have no maps to license to Microsoft. If they signed an agreement with Microsoft tomorrow, it'd still take several months for the first handset to come out. What would Blackberry be worth to Microsoft in a year?
The numbers are not in Blackberry's favor. That having been said, I will never underestimate Steve Ballmer's ability to overpay for a deal.
One of the most intriguing Windows Phone handsets that I saw when WP7 first hit the market was Dell's Venue Pro [1]. It very much seemed like a Microsoft response to the Blackberry market. I was surprised when it sold so poorly and was dropped without much fanfare.
Huh, that's an interesting device. Too bad it never saw a broader release. The photo in the Wikipedia article fails to show the most interesting feature it had, though: the physical keyboard; here's one that does: http://cdn.slashgear.com/wp-content/uploads/2010/10/dell_ven....
Now that Android phones with physical keyboards are becoming extinct perhaps Windows Phone could carve itself a new niche if Microsoft urged its phone manufacturers to ship devices with QWERTY. One thing I found lacking in Windows Phone 7 was the experience of entering text on the on-screen keyboard, especially in languages other than US English [1]. This is a a pity because WP doesn't support alternative input methods (e.g., Swype), however, a physical keyboard would more than make up for it.
They (or the company that buys them) should license BB10 to others. Like Microsoft does with windows mobile... It's the only path I can see for the blackberry OS to survive. Otherwise they'll be utterly crushed.
The problem is Blackberry is a hardware manufacturer, so they'd need a huge volume of sales in software to make up what they would lose in hardware.
That said, BB10 doesn't really offer anything compelling above Android for manufactures, and additional hardware isn't going to massively change their market share. BB customers have never been driven by cutting edge phones. Their application marketplace is so bad that there's no reason for general consumers to want to buy into the platform.
They definitely wouldn't survive a transition to a software company.
The reason their customers buy them has nothing to do with the hardware and everything to do with BBM. The only way out for them is as a service provider on alternate (Android, Windows, iOS) platforms.
Going private may enable them to continue to do this; any purchaser that makes sense (Microsoft) would be buying their customer list and the BBM brand. Dell buying them would be a Palm goes to HP level farce.
As a victim of the HP/Palm fiasco, I would give Dell the benefit of the doubt only because it is hard to imagine that they could match HP in the colossal screwup and destruction of a great product.
At 5 billion dollars of market cap, the company's worth less than what Microsoft paid for Skype. Frankly, Apple or Google should make this purchase just for their federal salesforce alone -- Blackberry knows how to do something those other companies don't do well and that's sell and entrench inside of Governments. That alone is worth billions. Give the iPhone to a Blackberry federal salesperson, and you've got billions.
"Research In Motion (RIM) has suffered yet another setback as the General Services Administration (GSA), the US government’s main procurement agency, announced its decision to provide iPhones and Android devices to its employees.
Though BlackBerrys will still be available from the agency, the announcement represents a general shift away from reliance on RIM products and a move towards a bring-your-own-device (BYOD) strategy."
Right. That's basically because employees (I used to work for the gov) want them, much to the CIO's dismay because the CIO is being better served by Blackberry sales folks than Apple's or Google's. By better served, I don't mean "taken out for golf," I mean "contracting vehicles have been set up by BlackBerry's experienced salesforce that makes this IT easy for a CIO to purchase." The SBA and many other agencies just renewed their blackberry contracts because, frankly, it was just easier for them to buy it. If you put an iPhone or an Android device into that existing framework for purchasing, it's game, set, match.
> Apple or Google should make this purchase just for their federal salesforce alone...
That wouldn't be a good reason for Apple to buy BB, it'd be a money losing proposition for them. The Feds have already moved on to Android phones and reversing that would take years.
From an acquisition perspective, the "price" is Market Cap + Debt - Cash. The total cost comes to just over $2B. At that price, I see it as a no brainer for Microsoft. They just need to ship a windows phone that is compatible with all the BB enterprise stuff, and IT departments will force it on the employees.
His point is that the company has a net cash position of $3bn, meaning someone who pays $5bn for the entire market cap of the company would immediately receive $3bn back in cash, making the real price effectively $2bn
But he is saying the $5bn already includes a discount for the cash you will get back. The market knows it has 3bn in cash lying around, so the market reckons that all of Blackberry's future profits and its on hand cash, are worth $8bn today, but that includes the $3bn of cash, so it adjusts the shares down to be $5bn - effectively saying the market thinks Blackberry can generate another $5bn worth of dividend-able profit for the rest of its life. For a company with an EBITDA of 1.3bn thats about 3 years.
Market capitalization is just the valuation implied by the current share price. (share_price * n_shares).
For a less ridiculous hypothetical, we know that BBRY has $3bn in cash right now. Supposing that it instead had $10bn in cash, its valuation would not be the same, it would be $7b higher. Its stock price (and equivalently its market capitalization) would reflect that, because the stock market is a place where people who disagree about the how to value the company go to make trades they believe are favorable. People who go to the public markets and act on the belief that ($10b in cash + a niche mobile phone business) should be valued at $5b would be rare. They would also be very wrong.
The current valuation of $5b implies that the niche phone business is worth $2b and the $3b in cash is worth $3b.
> Err, ok I am missing something from my basic economics - I was pretty certain the market cap of a company was its projected lifetime profits.
No, it is what the shareholder can, in principle, "take out" of the company, appropriately discounted. For a going concern, without excess cash, that is going to be, to a first approximation, something like discounted earnings.
> So if a lemonade stand has 3bn in cash it's done pretty well selling lemonade surely?
Not necessarily. When starting a business you need cash, even pre-revenue. Even if the cash were generated entirely from the business somehow the business endeavor may no longer be valuable. Maybe people don't like lemonade anymore. Maybe lemons have gone extinct. In those cases future earnings are zero.
If someone wanted to acquire the lemonade business what would they pay? Probably not $3bn because that would just be moving numbers around (there is no reason normally to buy cash). They would pay whatever they could get out of the lemonade business proper (assets, future earnings). The $3bn would be returned to the shareholders.
So, the time value of money. Also, as foobarqux commented, this leads to a silly valuation of the very capitalized lemonade stand. If a similar-but-broke lemonade stand would be worth $1000, most people would be extraordinarily willing to pay $1000 for 1% of the very capitalized lemonade stand. It would make them millionaires!
As a thought exercise, what is the relevant "price" to acquire a company when the share price has fallen to zero (just before bankruptcy)? Free is the wrong answer.
How much does it cost to acquire a lemonade stand with $1B in the bank, and a market cap of 1.000001B?
Enterprise value will give an accurate "price" in both of these examples.
Slight problem there. If MS does this Nokia will drop Windows Phone like a hot stone, so in the gap between Nokia abandoning it because they won't want to compete directly with MS, and MS actually getting their own BB engineered phone out (likely to be several years), WP would have zero market presence. Surface has already royally pissed off MS laptop and tablet OEMs. This move would critically sour their relationship with the only viable WP hardware vendor.
I understand where you're coming from, and Microsoft may well come to decide that their best strategy is in-house hardware, but there's a major downside to such a move.
The market cap is the sticker price - how much it will cost to buy all the shares.
The cash the company has on hand is like a mail-in-rebate. After you've bought the company, you'll get that cash back, so you consider that rebate value against the sticker price when evaluating the price you're actually going to have to pay.
Debt is like an extra cost you also have to take on when you purchase the company - like a delivery charge. So you need to add that on to the sticker price to evaluate the true cost.
Since the true price is market cap + debt - cash, and the debt and cash are somewhat fixed, it should come as no surprise that the market cap, via the share price, adjusts itself such that the true price reflects the company's value more accurately than the market cap does.
So it's the other way round: the more debt a company of a given value has, the lower its market cap will be. Which makes more sense.
I think Blackberry has some juicy "smartphone" patents, too, that aren't so end-of-life as Motorola's patents.
Plus, BB10 is pretty great as an OS, and has the best and most efficient multi-tasking system from what I've noticed (stuff can run in the background without a big hit on battery life, and the transition between apps is very smooth).
QNX is a huge asset to the company, raking it customers worldwide in the embedded/real-time/safety-critical software markets. Open sourcing QNX would be a major move, as in a major loss, indeed!
If QnX is not an asset to the buyer because for instance, they already have an OS offering of their own this might just happen to pacify the various users out there (corporate, governmental). At least like that they could be relieved of the support burden of maintaining two OS's.
Not quite. They've announced they've formed a committee to explore strategic options: sale, partnerships, licensing (and by extension, taking themselves private). The thing that isn't reported here is that they announced the same thing in early 2012 -- though it is the first time they've explicitly mentioned sale, and they now have one specific bank representing them.
Also of possible interest is Prem Watsa's withdrawal from the board due to conflict of interest - this may hint at Fairfax's direct involvement in sale or other negotations around taking the company private.
In any case, I hope it works out well. With the QNX-based BB10 OS they've caught up to and in some ways surpassed the competition, particularly with recent and upcoming updates.
The problem they face is three-fold: the competition is now too firmly entrenched, making it extremely difficult to get consumer and developer mindshare.
This is compounded by (and in large part caused by) the fact that they waited so long - their legacy BB OS has rendered them largely irrelevant to most people, and that's a huge hurdle to overcome.
Finally, there is a lot of carrier antipathy in the US market. Carriers are doing virtually no supportive marketing, and updates that have rolled out internationally in July won't be out in the US until late September.
Competition is heating up in the low-margin areas outside of the US that have typically bolstered their sales.
Their future is looking pretty uncertain (and I say this as someone who develops BB apps) - a manufacturing or licensing deal could provide them with what they need to keep going.
> This is compounded by (and in large part caused by) the fact that they waited so long - their legacy BB OS has rendered them largely irrelevant to most people, and that's a huge hurdle to overcome.
BB users are also a strange lot. The ones I know at least tend to be very conservative about their equipment choice. Hauling around 6 or 7 year old BBs because newer ones move the icons around or they don't like the keyboards or what have you. They want exactly the experience they have right now and nothing else. I've known a half dozen who bought and returned both Androids and iPhones (trying to get with modernity a little) pretty much because they weren't BBs...or at least all of their problems with the other two phones were why this or that wasn't like it was on their BB.
This has been a very big problem for Blackberry. They invest in finally modernizing and updating their hardware and software, but everybody who's not already a BB user has moved on, and the ones who've remained don't want the new stuff because it's not just exactly what they already have.
Their only chance would have been to capture the non-conservative parts of the market before they left years ago. That boat set sail long ago.
Probably worth buying for the patents, sales channels and manufacturing bits. Cut most of software dev and turn them into an Android phone maker...maybe specialize on low powered, ultra long battery life phones of something.
Android apps need to be packaged into a .BAR file (simple tool) and signed with a BlackBerry signing key so it can be submitted to BlackBerry World. There is no Google Play, or Amazon App Store, or any other Android-specific app store.
If you don't want to submit to BlackBerry World, you would need to sideload the app. You still need to sign it with a BlackBerry key.
Does anyone else suspect that Blackberry/RIM's troubles might be something along the lines of what has happened to LavaBit? Wasn't their device/architecture similar to LavaBit's at least in that comm's were sent encrypted to a server either controlled by RIM, or by a third party (individual companies, gov't agencies, etc.)
Then, some time in the not-too-distant past, various world governments started making a big conspicuous deal out of getting "lawful access" to those servers.
Then, there were a few widely reported reputation damaging service outages.
Then, they became unable to design and manufacture a new phone, despite years of experience making Blackberry phones.
Given the surveillance controversy, BB ought to be "killing it" as some say, except that new BB10 devices are more like BB branded commodity smartphones, the data is no longer encrypted en-route, and the cost for "secure email" has gone up dramatically, and is licensed separately where it used to be a built-in feature.
No, as a moment's thoughtful speculation would make clear. The public information we have about Blackberry neé RIM is entirely sufficient to explain why they're floundering.
When governments came knocking, RIM didn't even put up a fight; before Snowden, they were largely considered the last vendor you'd ever choose, if you cared about your privacy from governments. They had the same excruciating soul-search for a new OS as Nokia, once Apple and Google leapfrogged their early-2000s shitty UIs, and then settled for a good platform when it was way too late. So I'd take the tinfoil off...
For the good of humanity, I hope someone reasonable (Google?) buys the ex-Certicom ECC patents and opens them up (free, ideally, but genuinely easy to license would be ok.)
I was lucky to see the notice published in the federal register a while ago (6 or 7 years ago atleast) and made a little pocket cash when the market realized that Certichron was undervalued.
Amazon and Blackberry are the ideal fit. Amazon needs to gain independence from Android, they have the marketplace and the muscle to take advantage of all things Blackberry has in it's favour.
The hardware business is dead and dusted. Amazon needs a platform to sell you things, not a difficult hardware business. Blackberry's only useful assets are their enterprise software and sales teams; everything else is noise.
Amazon is already in the hardware business and it is far from dead and dusted. Sorry to disagree. The Kindle Fire is a significant component in their business, it's currently running on Android, BB10 is an excellent OS + platform. Makes sense to buy BBRY, port to Kindle, disjoin from one of your biggest competitors and keep or eject the remaining pieces of BBRY hardware available on a case by case basis. The Q10 is a nice piece of hardware and BB10 is a great platform.
It's a natural fit and like I mentioned above Amazon was quite interested 18 months ago, I doubt much there has changed except the fact that the market cap for BBRY has fallen since then, making it an even more attractive asset to Amazon.
As a Blackberry Z10 owner (who has also owned several generations of iPhones and Nokia's Lumia 920) I think BlackBerry needs to stick it out. The Z10 has a great OS. The touchscreen gestures are ingenious. The Hub (where the email and notifications are) is a fresh innovation.
The device in general is well thought out.
Also important to note that the Z10 has privacy and encryption features no other phone I know of has.
Blackberry has something good, and while Google and Microsoft continue to hemorrhage users because of trust violations, BlackBerry can win back market share. It can happen!
As an Android developer by day, and a BlackBerry developer by night, it boggles my mind why everyone thinks BB10 is crap, and that no one wants it.
Spend 1 week with a BlackBerry Z10 or Q10, and you'll see how great it actually is in comparison to other platforms. Spend some time developing an app for it in Qt and Cascades, and you'll see how great it is to develop for, in comparison to other platforms.
People also need to realize that this isn't RIM; that company was big, sluggish, and full of idiots running it. BlackBerry is a much different company now. They're very humbled, and willing to listen to their customers and developers. As an example, I was looking at their Bluetooth APIs a few months ago, trying to figure out how to do out-of-band (OOB) pairing for a client. The APIs existed, but they were marked internal-use-only. I contacted their developer relations team, who put me in touch with the engineers so I could explain my use case. They said they'd review it and let me know. Lo and behold, in the new 10.2 beta SDK, those APIs are now available for all developers to use. It's one anecdotal example, but talk to others in the community and you'll hear many more like it.
I haven't used BB10 yet, but I am willing to believe you. However, I think the issue is that success on the mobile OS market is determined in a large part by the ecosystem around it. The ecosystem is heavily influenced by network effects (i.e. the more users, the higher the value of the network) en BB is way behind in this aspect. They still have many users but the amount of apps pale in comparison to Apple and Android.
If Apple, Android, Windows and BlackBerry would all have started at the same time, we would have seen different results (maybe). But the simple fact remains that BB is very, very late to the game. And once market dominance is reached, as Apple and Android have, competitors can only change that dominance by being dramatically better. And I get the impression that BB10 is somewhat better.
Perhaps it is being remade. They (finally, belatedly) got rid of the old guard at RIM, including the CEOs. The question is if Thorsten Heins can pull a Jobs.
Which isn't a knock on him if he can't - after all, Steve Jobs was an extreme outlier in a field of extreme outliers.
That said, Apple turned themselves by mostly abandoning their roots (big beige boxen) and go in a completely different, largely unprecedented direction - I don't see BB doing this. Even the iMac, iconic as it was, wasn't the turnaround point for Apple - iPod was.
> Even the iMac, iconic as it was, wasn't the turnaround point for Apple - iPod was.
Good point. Reminds me of Chrysler under Iaccoca. The K-car stopped the cash bleed and restored the company's reputation, but it was the minivan that made them fabulously profitable.
"Why [does] everyone thinks BB10 is crap?"
"[RIM] was big, sluggish, and full of idiots running it."
Everything you write about BB being a new nimble company may be 100% true... but public perception lags truth, especially when many people have already written them off.
The unfortunate thing is that brand/marketing has never been RIM's strong suit (a typical woe of Canadian tech giants), but it sounds like the "this-aint-your-grandfathers-RIM" story is crucial to their overall turnaround story.
BB10 may be nice but the damn thing still lacks apps. There's no point having a great phone and great OS with no app coverage.
At least three times now in the past month someone has recommended an app to me an sure enough...no blackberry option. Android and iOS only.
What I don't understand is why they don't force popular apps onto their platform. Even if no companies are jumping to develop for Blackberry, pay them to do it. Get them onto your platform with no cost on their end. Pay for ongoing support if necessary. App coverage is absolutely crucial and at this point, with BB10 being what it is, I'd say app coverage is now the #1 problem for their phones.
They've gone pretty far down the crap slide now. Maybe they've given up.
You mean they try to pay companies to develop apps for their platform and the companies refuse? Why would that be? Can you provide details about what happened with your company?
I don't know the exact situations behind HorizonXP's company and their refusal, but having worked in devrel on two minority platforms, I can share with you some common reasons:
-[small companies] even if you bought them a developer, it would impede their ability to be agile and pivot and iterate as they try to find something that works. It's hard enough to get them to support Android in addition to iOS, but getting them to support WP or BB10 is even harder
-[big companies] don't need the money. Or would ask for outrageous fees (some companies have asked for north of $20 million, even for faddish apps)
-[big companies] have an existing solution to do cross-platform development for iOS and Android and it's not worth it to redo it to add WP/BB support
-[small companies] complete lack of familiarity with the Microsoft stack.
-pressure from Apple or Google (usually Apple). I've had cases where a company gets favorable placement in the app store or in a commercial, or placement on the demo devices in a retail store and planned Windows ports are put "on ice" because they don't want to jeopardize their relationship with Apple (which of course has reserved the right to be as capricious and arbitrary with its app policies as they like)
-personal dislike. Believe it or not, some companies are run by people who just have a personal dislike of BlackBerry or Microsoft that is so strong that they'd rather spite them than add to their customer base. It's incredibly immature, but nothing we can do about it.
the problem is that to encourage native app development, they've made it needlessly difficult to get those Android apps over. Either they have to convince the developer to convert the .apk to a BB10 .bar file and submit to BlackBerry World, or the use has to find an .apk (a legal gray area and logistical hassle) and sideload it to the device through a process that involves no official BlackBerry tools.
This sucks for Canada. Less than five years ago RIM/BlackBerry's share prices were trading at ~$150, now it's $10! I can see this depressing Canadian start-ups and its tech industry. Like Kodak, the main reasons for BB's downfall was their own human mistakes - complacency, hubris, and arrogance.
Actually if you look at the Nokia example, quite the opposite can happen. A large, prominent, "national champion" company absorbs a huge amount of talent. As Nokia has downsized thousands of workers, they released thousands of entrepreneurs and engineers into the Finnish startup ecosystem. It's exciting times in Helsinki nowadays. The same could happen in Waterloo, and in Canada as a whole.
Man, the long sad story of RIM/Blackberry. They should learn something from Samsung, and Samsung should heed the history of RIM.
Blackberry made good hardware with terrible, terrible software. Samsung, so far, has focused on hardware and left the software to other people. It has allowed Samsung to focus on their core expertise and grow fast.
However, there is always the rumor that Samsung is building Tizen internally. This, IMO, would be a huge mistake. Samsung should focus on phones and leave the software to other people (Android, Ubuntu).
Realistically, I think Blackberry could do the same if they focused on their hardware and the enterprise market. If there was a high-riser who was shooting for something in Blackberry, they should be talking to Canonical right now and focus on making Ubuntu enterprise ready on their hardware. They could dominate that market for years.
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[ 2.7 ms ] story [ 221 ms ] threadSeems more likely they'll partner with someone. Or maybe sell off just their hardware business. I think BB as a whole isn't going away just yet.
Like I said, a sale is one of the things being considered in a long list of other options. But the title doesn't convey that.
> These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions.
http://www.marketwire.com/press-release/blackberry-board-of-...
* Microsoft still has plenty of cash, but is facing an existential crisis of losing platform relevance
* Their overall mobile marketshare is so low that they can probably throw that cash around with much antitrust attention
* They've had a hard time attracting hardware makers other than Nokia. If Nokia stumbles further, the whole phone platform could unravel.
* The traditional Blackberry market was enterprises, who probably would be a lot more receptive to the "windows everywhere" story than Nokia's customers ever were. Blackberry's original killer feature was arguably MS Exchange integration.
If that were their route they'd have to drop their investment in QnX, try to adapt all BB software to run under the latest incarnation of Windows Phone rather than to just run Windows Phone on it. BB users are quite particular about their handsets & associated software, much more so than Nokia users ever were.
Of course this could be totally wrong but I think the challenges in moving BB to Windows Phone are far more substantial than to get Nokia to convert even if BB is a smaller player.
Just as Nokia had to drop their investment in Symbian and Maemo
> BB users are quite particular about their handsets
However they're not particular about BB10 (the QNX one you mention) since most of them aren't even running it. If anything, the fact that they're in the middle of a delicate platform shift makes the parallels with Nokia in 2011 all the more striking.
Anyway, its all just idle speculation on my part.
Consider me convinced, that might just work out well for them, if they're going to switch anyway it might as well be to a company that is already well represented in the enterprise. How they're going to give those users the blackberry experience is beyond me though, but that would probably not stop an acquisition.
With 7.4 million Lumias sold last quarter, at $25 per Windows Phone license, Nokia is drawing just $70 million each quarter from Microsoft. At 10 million units, they'd start paying Microsoft money.
Blackberry sold 6.8 million units last quarter. They have no maps to license to Microsoft. If they signed an agreement with Microsoft tomorrow, it'd still take several months for the first handset to come out. What would Blackberry be worth to Microsoft in a year?
The numbers are not in Blackberry's favor. That having been said, I will never underestimate Steve Ballmer's ability to overpay for a deal.
[1] http://en.wikipedia.org/wiki/Dell_Venue_Pro
Now that Android phones with physical keyboards are becoming extinct perhaps Windows Phone could carve itself a new niche if Microsoft urged its phone manufacturers to ship devices with QWERTY. One thing I found lacking in Windows Phone 7 was the experience of entering text on the on-screen keyboard, especially in languages other than US English [1]. This is a a pity because WP doesn't support alternative input methods (e.g., Swype), however, a physical keyboard would more than make up for it.
[1] See, e.g., http://forums.wpcentral.com/windows-phone-8/225491-windows-p.... Note that the forum post is about version 8.
Sorry, couldn't resist.
That said, BB10 doesn't really offer anything compelling above Android for manufactures, and additional hardware isn't going to massively change their market share. BB customers have never been driven by cutting edge phones. Their application marketplace is so bad that there's no reason for general consumers to want to buy into the platform.
They definitely wouldn't survive a transition to a software company.
Going private may enable them to continue to do this; any purchaser that makes sense (Microsoft) would be buying their customer list and the BBM brand. Dell buying them would be a Palm goes to HP level farce.
http://www.techweekeurope.co.uk/news/rim-suffers-fresh-blow-...
"Research In Motion (RIM) has suffered yet another setback as the General Services Administration (GSA), the US government’s main procurement agency, announced its decision to provide iPhones and Android devices to its employees.
Though BlackBerrys will still be available from the agency, the announcement represents a general shift away from reliance on RIM products and a move towards a bring-your-own-device (BYOD) strategy."
That wouldn't be a good reason for Apple to buy BB, it'd be a money losing proposition for them. The Feds have already moved on to Android phones and reversing that would take years.
So if a lemonade stand has 3bn in cash it's done pretty well selling lemonade surely?
For a less ridiculous hypothetical, we know that BBRY has $3bn in cash right now. Supposing that it instead had $10bn in cash, its valuation would not be the same, it would be $7b higher. Its stock price (and equivalently its market capitalization) would reflect that, because the stock market is a place where people who disagree about the how to value the company go to make trades they believe are favorable. People who go to the public markets and act on the belief that ($10b in cash + a niche mobile phone business) should be valued at $5b would be rare. They would also be very wrong.
The current valuation of $5b implies that the niche phone business is worth $2b and the $3b in cash is worth $3b.
No, it is what the shareholder can, in principle, "take out" of the company, appropriately discounted. For a going concern, without excess cash, that is going to be, to a first approximation, something like discounted earnings.
> So if a lemonade stand has 3bn in cash it's done pretty well selling lemonade surely?
Not necessarily. When starting a business you need cash, even pre-revenue. Even if the cash were generated entirely from the business somehow the business endeavor may no longer be valuable. Maybe people don't like lemonade anymore. Maybe lemons have gone extinct. In those cases future earnings are zero.
If someone wanted to acquire the lemonade business what would they pay? Probably not $3bn because that would just be moving numbers around (there is no reason normally to buy cash). They would pay whatever they could get out of the lemonade business proper (assets, future earnings). The $3bn would be returned to the shareholders.
It explains my perspective.
As a thought exercise, what is the relevant "price" to acquire a company when the share price has fallen to zero (just before bankruptcy)? Free is the wrong answer.
How much does it cost to acquire a lemonade stand with $1B in the bank, and a market cap of 1.000001B?
Enterprise value will give an accurate "price" in both of these examples.
I understand where you're coming from, and Microsoft may well come to decide that their best strategy is in-house hardware, but there's a major downside to such a move.
If MS did buy Nokia, they would make a guarantee to Nokia, just as Google did.
So the more debt company has, and the less cash it has, the more valuable it is? That makes no sense at all.
The market cap is the sticker price - how much it will cost to buy all the shares.
The cash the company has on hand is like a mail-in-rebate. After you've bought the company, you'll get that cash back, so you consider that rebate value against the sticker price when evaluating the price you're actually going to have to pay.
Debt is like an extra cost you also have to take on when you purchase the company - like a delivery charge. So you need to add that on to the sticker price to evaluate the true cost.
Since the true price is market cap + debt - cash, and the debt and cash are somewhat fixed, it should come as no surprise that the market cap, via the share price, adjusts itself such that the true price reflects the company's value more accurately than the market cap does.
So it's the other way round: the more debt a company of a given value has, the lower its market cap will be. Which makes more sense.
Plus, BB10 is pretty great as an OS, and has the best and most efficient multi-tasking system from what I've noticed (stuff can run in the background without a big hit on battery life, and the transition between apps is very smooth).
See: http://community.qnx.com/sf/wiki/do/viewPage/projects.commun...
Microsoft has always been a good fit for taking over Blackberry, but MS and BB have diverged too far.
Google might just pull another Motorola move and buy them up to add to their patent portfolio.
Reality aside, it would also make them owners of QNX.
Also of possible interest is Prem Watsa's withdrawal from the board due to conflict of interest - this may hint at Fairfax's direct involvement in sale or other negotations around taking the company private.
In any case, I hope it works out well. With the QNX-based BB10 OS they've caught up to and in some ways surpassed the competition, particularly with recent and upcoming updates.
The problem they face is three-fold: the competition is now too firmly entrenched, making it extremely difficult to get consumer and developer mindshare.
This is compounded by (and in large part caused by) the fact that they waited so long - their legacy BB OS has rendered them largely irrelevant to most people, and that's a huge hurdle to overcome.
Finally, there is a lot of carrier antipathy in the US market. Carriers are doing virtually no supportive marketing, and updates that have rolled out internationally in July won't be out in the US until late September.
Competition is heating up in the low-margin areas outside of the US that have typically bolstered their sales.
Their future is looking pretty uncertain (and I say this as someone who develops BB apps) - a manufacturing or licensing deal could provide them with what they need to keep going.
BB users are also a strange lot. The ones I know at least tend to be very conservative about their equipment choice. Hauling around 6 or 7 year old BBs because newer ones move the icons around or they don't like the keyboards or what have you. They want exactly the experience they have right now and nothing else. I've known a half dozen who bought and returned both Androids and iPhones (trying to get with modernity a little) pretty much because they weren't BBs...or at least all of their problems with the other two phones were why this or that wasn't like it was on their BB.
This has been a very big problem for Blackberry. They invest in finally modernizing and updating their hardware and software, but everybody who's not already a BB user has moved on, and the ones who've remained don't want the new stuff because it's not just exactly what they already have.
Their only chance would have been to capture the non-conservative parts of the market before they left years ago. That boat set sail long ago.
Not well. They're sluggish, and no features past Gingerbread are supported.
If you don't want to submit to BlackBerry World, you would need to sideload the app. You still need to sign it with a BlackBerry key.
Then, some time in the not-too-distant past, various world governments started making a big conspicuous deal out of getting "lawful access" to those servers.
Then, there were a few widely reported reputation damaging service outages.
Then, they became unable to design and manufacture a new phone, despite years of experience making Blackberry phones.
Given the surveillance controversy, BB ought to be "killing it" as some say, except that new BB10 devices are more like BB branded commodity smartphones, the data is no longer encrypted en-route, and the cost for "secure email" has gone up dramatically, and is licensed separately where it used to be a built-in feature.
/tinfoil
2) 2048 < 256
3) ∅
I was lucky to see the notice published in the federal register a while ago (6 or 7 years ago atleast) and made a little pocket cash when the market realized that Certichron was undervalued.
Takes one to know one I guess.
Remember they have already been in discussions in the past: http://www.dailymail.co.uk/sciencetech/article-2077067/Amazo...
Neither MSFT nor Samsung really make sense as purchasers IMHO.
Depending on where Amazon wants to take Kindle, that could be useful.
It's a natural fit and like I mentioned above Amazon was quite interested 18 months ago, I doubt much there has changed except the fact that the market cap for BBRY has fallen since then, making it an even more attractive asset to Amazon.
The device in general is well thought out.
Also important to note that the Z10 has privacy and encryption features no other phone I know of has.
Blackberry has something good, and while Google and Microsoft continue to hemorrhage users because of trust violations, BlackBerry can win back market share. It can happen!
Spend 1 week with a BlackBerry Z10 or Q10, and you'll see how great it actually is in comparison to other platforms. Spend some time developing an app for it in Qt and Cascades, and you'll see how great it is to develop for, in comparison to other platforms.
People also need to realize that this isn't RIM; that company was big, sluggish, and full of idiots running it. BlackBerry is a much different company now. They're very humbled, and willing to listen to their customers and developers. As an example, I was looking at their Bluetooth APIs a few months ago, trying to figure out how to do out-of-band (OOB) pairing for a client. The APIs existed, but they were marked internal-use-only. I contacted their developer relations team, who put me in touch with the engineers so I could explain my use case. They said they'd review it and let me know. Lo and behold, in the new 10.2 beta SDK, those APIs are now available for all developers to use. It's one anecdotal example, but talk to others in the community and you'll hear many more like it.
And that is not enough.
The brand is ruined, much like Yahoo, Myspace or AOL.
Which isn't a knock on him if he can't - after all, Steve Jobs was an extreme outlier in a field of extreme outliers.
That said, Apple turned themselves by mostly abandoning their roots (big beige boxen) and go in a completely different, largely unprecedented direction - I don't see BB doing this. Even the iMac, iconic as it was, wasn't the turnaround point for Apple - iPod was.
Good point. Reminds me of Chrysler under Iaccoca. The K-car stopped the cash bleed and restored the company's reputation, but it was the minivan that made them fabulously profitable.
"Why [does] everyone thinks BB10 is crap?" "[RIM] was big, sluggish, and full of idiots running it."
Everything you write about BB being a new nimble company may be 100% true... but public perception lags truth, especially when many people have already written them off.
The unfortunate thing is that brand/marketing has never been RIM's strong suit (a typical woe of Canadian tech giants), but it sounds like the "this-aint-your-grandfathers-RIM" story is crucial to their overall turnaround story.
At least three times now in the past month someone has recommended an app to me an sure enough...no blackberry option. Android and iOS only.
What I don't understand is why they don't force popular apps onto their platform. Even if no companies are jumping to develop for Blackberry, pay them to do it. Get them onto your platform with no cost on their end. Pay for ongoing support if necessary. App coverage is absolutely crucial and at this point, with BB10 being what it is, I'd say app coverage is now the #1 problem for their phones.
They've gone pretty far down the crap slide now. Maybe they've given up.
-[small companies] even if you bought them a developer, it would impede their ability to be agile and pivot and iterate as they try to find something that works. It's hard enough to get them to support Android in addition to iOS, but getting them to support WP or BB10 is even harder
-[big companies] don't need the money. Or would ask for outrageous fees (some companies have asked for north of $20 million, even for faddish apps)
-[big companies] have an existing solution to do cross-platform development for iOS and Android and it's not worth it to redo it to add WP/BB support
-[small companies] complete lack of familiarity with the Microsoft stack.
-pressure from Apple or Google (usually Apple). I've had cases where a company gets favorable placement in the app store or in a commercial, or placement on the demo devices in a retail store and planned Windows ports are put "on ice" because they don't want to jeopardize their relationship with Apple (which of course has reserved the right to be as capricious and arbitrary with its app policies as they like)
-personal dislike. Believe it or not, some companies are run by people who just have a personal dislike of BlackBerry or Microsoft that is so strong that they'd rather spite them than add to their customer base. It's incredibly immature, but nothing we can do about it.
BB10 has an Android compatibility layer, so that might bring over some apps that might be still lacking.
Blackberry made good hardware with terrible, terrible software. Samsung, so far, has focused on hardware and left the software to other people. It has allowed Samsung to focus on their core expertise and grow fast.
However, there is always the rumor that Samsung is building Tizen internally. This, IMO, would be a huge mistake. Samsung should focus on phones and leave the software to other people (Android, Ubuntu).
Realistically, I think Blackberry could do the same if they focused on their hardware and the enterprise market. If there was a high-riser who was shooting for something in Blackberry, they should be talking to Canonical right now and focus on making Ubuntu enterprise ready on their hardware. They could dominate that market for years.