Blackberry’s desperate bid for survival may not bear fruit

TORONTO — BlackBerry’s decision to hang up the “For Sale” sign has met with muted reaction, with little indication there will be many potential buyers for a company which has fallen spectacularly after previously being a darling of the tech world.

BlackBerry said on Monday it is exploring strategic options, which could involve the company being sold, taken private or broken up.

The move comes after its newest range of smartphones, launched earlier this year, failed to catch the interest of buyers, especially in the key North American market.

According to figures released last week by the International Data Corporation, BlackBerry’s market share in the United States is less than 3 per cent, down from almost 50 per cent in 2009.

That is a calamitous decline for a company whose devices were once seen as so habit-forming that its users dubbed it the “Crackberry”.

Ms Carolina Milanesi, an analyst at Gartner, said the firm has not done enough to maintain its market-leading position after rivals tapped into growing demand for multimedia devices that offered more than just an effective digital communications channel.

“They have suffered a fate a lot of big guys suffer from. They were the first to market, they created the smartphone as we know it. They just didn’t see what was coming next,” she said.

Its fall from grace has left analysts questioning who would want to buy BlackBerry. Speculation has circulated for years that large technology companies, notably Microsoft, have already looked at BlackBerry and decided to pass.

Chinese company Lenovo said earlier this year it would consider a bid for BlackBerry to boost its mobile business. But Chinese involvement would trigger concerns about security issues from the Canadian government.

Canadian pension companies have also expressed some interest. The Canada Pension Plan Investment Board said last week it would weigh an investment if the company decided to go private and Alberta Investment Management echoed that sentiment after BlackBerry announced its strategic review.

But their involvement may fall short of an outright purchase, leaving the way open for the company to undergo a transformation rather than continue in markets in which it has struggled for years.

Mr Stuart Jeffrey, an analyst at Nomura Securities, predicted that BlackBerry would likely re-emerge as a software firm, perhaps with some contracts for super-secure government devices, but “without the handicap of all those uncompetitive handsets”.

Whatever happens, how a company that once defined the smartphone messed up so badly is likely to become a classic case study for business schools around the world.

Smartphones these days are more about music, photos and video than they are about email, said Ms Milanesi, and BlackBerry, for too long relied on its business customers to keep it in the game. “But these days you don’t want to be boring in business,” she added. AGENCIES