The difference between [the P4] and the [Athlon] die size is frigging huge - AMD's Jerry Sanders III
ON MONDAY Fairfax Financial Holdings made an offer to acquire struggling Canadian phone maker Blackberry for $4.7bn in a move that would take the company private.
While the deal will take around six weeks to close, it sees Blackberry taking a leaf out of Dell's book as it hopes pulling out of the stock market will ease pressure from investors, allowing it to focus on the "prosumer" market that it is eagerly looking to for survival. The firm has already announced its intention to exit the consumer market due to the lack of success of its Blackberry Z10 smartphone, which has led the firm to estimate a fiscal second quarter loss of up to $1bn.
While Blackberry must be breathing a sigh of relief that it has been thrown a lifeline, we're not sure that taking the company private will present the solution to its problems, although it will be a good thing in terms of easing pressure on the company.
The firm still needs a winning strategy going forward, and it's hard to believe that the company has a long term strategy up its sleeve that will turn its fortunes around, as surely that would have been revealed earlier.
These thoughts are reflected in comments made by Jan Dawson, chief telecoms analyst at Ovum, who seemed to sum up Blackberry's position well. She said, "Taking Blackberry private doesn't solve the fundamental problems at the company.
"Normally, companies are taken private in order to give a long term strategy time to pay off without the hassles of short term investor scrutiny. But Blackberry's key problem for the last couple of years has been the lack of such a long term strategy. It simply hasn't articulated a way to rebuild its business as its device sales drop precipitously. Unless Fairfax plans to radically change or accelerate Blackberry's strategy, it's unlikely to be able to turn the company around.
"And that means we're likely seeing the beginning of the end for one of the most iconic brands in mobile technology."
Of course, the firm always has the enterprise market, right? Well, kind of. With the growing popularity of Windows Phone in the business market, and recent acceptance of iOS and Android as secure devices that can work in business, are companies really going to stick with Blackberry and its deserted Blackberry World? That seems unlikely.
As Dawson also noted, Blackberry's continued failure in the consumer market will make it tricky for the firm to suddenly become a major player again in the business smartphone market, due to the lack of scalability of the business.
Dawson said, "The company's device sales are cratering, and its announcement last week that it no longer intends to pursue the consumer market is essentially the death knell for this business. Blackberry's supply chain relies on scale for profitability, and it will never again be able to achieve the scale necessary to make money on devices.
"It's likely that Blackberry will be out of the device business entirely by the middle of next year."
If Dawson is correct, it's sad for the smartphone business. Blackberry was one of the first companies to take email and mobile messaging mainstream, yet it seems that the early innovators are being pushed out of the market by Apple and Samsung, who continue to innovate going forward. The same can be said for Nokia, one of the first popular mobile phone companies that recently has been struggling to remain relevant due to the growing competition from iOS and Android, and has since been acquired by Microsoft.
Unless Fairfax has some mystery plan hidden away to help Blackberry innovate and become a major player in the market again, it looks like it might be time to say goodbye to the company, and QWERTY phones, for good. µ
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