I know. It has been a while since I've written a 'From the Editor's Desk' post and I should probably write more of them, but to be honest I really need to feel pretty strongly about something in order to write them and the past few days have me a little fired up. With that out of the way, the past three days have been interesting for the BlackBerry world, made even more so when you consider the timing of everything, and some of it has me fired up.
We've had a few new takeover rumors and BlackBerry has confirmed an unspecified number of layoffs along with a new common share purchase program. If that's not enough, there were some rumblings about the possibility of BlackBerry using Samsung's Exynos processors for some of their next-gen smartphones and to add even more to the mix there's a new and dramatically titled book coming out about the "rise and fall of BlackBerry", though that story is still ongoing.
This is probably the least interesting piece of the news, simply because it seems there isn't a week that goes by that there isn't some rumor about someone looking to take over BlackBerry. According to DigiTimes, 'Microsoft and a number of China-based handset vendors, including Xiaomi Technology, Lenovo, and Huawei, are being indicated as potential investors.' Sounds all rather familiar, right? It's like we've stepped into a time machine and gone back three or four years.
DigiTimes goes on to report 'Microsoft reportedly has commissioned investment companies to evaluate the possibility of taking over BlackBerry, aiming to enhance its competitiveness in the business mobile solution segment as well as its patent portfolio in the Internet of Vehicles (IoV), mobile platform and communications sectors.' But like all rumors, it had to start somewhere and in this case it's Betaville. Similar rumors were noted there on May 15th highlighting 'Microsoft has asked investment bankers to examine whether it should purchase BlackBerry', namely Deutsche Bank and Goldman Sachs. They also stated that 'Microsoft has not yet made an approach for BlackBerry and is still in the very early stages of looking into buying the business. It's quite possible the technology group may decide against pursuing BlackBerry.'
Now, there's still no way to tell whether there's any substance to these rumors but somehow after the post on Betaville about Microsoft looking into taking over BlackBerry it got extended to Xiaomi, Lenovo, and Huawei, which we know from past rumors isn't very likely at all due to the Canadian Government involvement in any foreign acquisitions of BlackBerry. Following the source, even the Betaville post gave the information a rare rating, which by their definition means it's market gossip that hasn't been tested through all formal journalistic channels and could be complete BS. Sadly, it seems a lot of people missed the Betaville post and just went with the DigiTimes report because despite being wrong many times in the past, having them as a source for rumors is likely better than Betaville.
The latest rumor making headlines right this very second? Microsoft will acquire BlackBerry for $7B. But that number has been tossed around for the past several days now. Even outlets who reported the initial takeover rumors are now reporting the $7B pricing as new to keep it in the news cycle. Wake me when it REALLY happens, until then, it's all rather a bore. Well, unless you're following BBRY stock where you're either pulling your hair out right now or celebrating some of the latest news. Could go both ways really, depending on whether you're a bull or a bear.
What started on Friday as rumor that BlackBerry would be laying off an unspecified amount of employees has now been confirmed by BlackBerry. Judging by the surprise from folks, it would seem many took the 'no more layoffs' memo from John Chen a little too literally, like there would never be another layoff at BlackBerry after that memo was issued. I'm not trying to downplay the significance here, but people get hired, fired, or laid off from BlackBerry all the time. Still though, I recognize that this round of layoffs isn't exactly standard operating procedure either but the statement from BlackBerry, presented in full below because so few outlets actually posted it in its entirety, is pretty honest. Even as these layoffs are being announced, they are also hiring for new positions, as can be viewed on the BlackBerry careers site.
As we continue executing our plan for BlackBerry's turnaround, we remain focused on driving efficiencies across our global workforce. As the Company moves into its next stage of the turnaround, our intention is to reallocate resources in ways that will best enable us to capitalize on growth opportunities while driving toward sustainable profitability across all facets of our business.
As a result, we have made the decision to consolidate our device software, hardware and applications business, impacting a number of employees around the world. We know that our employees have worked hard on behalf of our company, and we are grateful for their commitment and contributions.
One of our priorities is making our device business profitable. At the same time, we must grow software and licensing revenues. You will see in the coming months a significant ramping up in our customer-facing activities in sales and marketing. We will also continue to make strategic partnerships and hires to focus on driving sales and delivering new offerings across high-growth areas of our business. We continue to grow customer-facing teams around the world, and we continue to invest in bringing in new talent to support areas of strategic focus around software, enterprise, security and Internet of Things, for example. These investments will put us on the path to growth.
When I look at this announcement, I see what John Chen has been saying for a while being laid out once again. He's going to keep the hardware business going and attempt to make it profitable but, he's going ensure that other areas, where BlackBerry can see growth and profit, are sufficiently covered. Perhaps, the most interesting portion of the statement isn't really about the layoffs but rather the mention that BlackBerry will in the coming months be ramping up their 'customer-facing activities in sales and marketing', which as we know has been a pain point among many BlackBerry fans.
In the end, there's still a ton of rumors and speculation surrounding these latest layoffs and it's hard to say when or even if we'll really hear more about them, especially since BlackBerry isn't saying exactly how many people got laid off. We're all just watching and hoping for further details to come when the Q1 Fiscal 2016 reports which take place on June 23 get announced and John Chen will, hopefully, be asked to elaborate on the matters.
Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry
Back in September of 2013, the Globe and Mail posted an extensive report that took a look deep inside BlackBerry and examined much of the direction of the company for the last few years. That article was, and arguably still is, one of the most talked about articles that covered BlackBerry due to what it revealed about the company.
At the time, the investigative report was put together by Sean Silcoff, Jacquie McNish, and Steve Ladurantaye. Now two of those writers, Sean Silcoff and Jacquie McNish, have gotten together to release the dramatically titled Losing the Signal: The Untold Story Behind the Extraordinary Rise and Spectacular Fall of BlackBerry which has been getting a ton of play across sites such as the Globe and Mail (naturally), the Wall Street Journal, CBC, and more in advance of its release on May 26.
Losing the Signal, as far as I can tell from the released excerpts, rehashes a lot of what was noted in the Globe and Mail article. Highlights include the launch of the iPhone and how then Co-CEOs Mike Lazaridis and Jim Balsillie reacted to the device, the launch of the BlackBerry Storm, PlayBook and even early discussions surrounding cross-platform BBM. In fact, the key excerpt being highlighted throughout most outlets is the story of the BlackBerry Storm and how it came to life as a reaction to the iPhone with some pressure from Verizon and Vodafone, because you know, sticking iPhone in a headline next to BlackBerry grabs attention.
That particular story is one I'm sure many, many, many BlackBerry followers are already fully aware of but if you've never heard it before, it's a fascinating read, especially for me as a person who believes the BlackBerry Storm was the worst devices ever released by BlackBerry, though a lot of folks disagree with me every time I mention this because they really loved the Storm. Still, I'm not sure how that's even possible. For me, it was a flawed device that came at a very crucial time, and it just didn't work out. While it sold huge numbers off the line, it ended up costing BlackBerry more than money. It cost them an enormous piece of their reputation. It turned people bitter and sour on BlackBerry, especially Verizon users, some of whom ditched BlackBerry never to return based on their Storm experience. The iPhone existed and DROID was on the rise within Verizon, it was a bad time for BlackBerry to release something that just wasn't right.
Personal opinions about Storm and the book being a rehashing of sorts aside, there's no doubt in my mind it will still be an entertaining read. The authors claim to have had pretty extensive access to Mike Lazaridis and Jim Balsillie. Plus, they apparently interviewed over 120 various 'insiders' who would have the type of knowledge they'll looking to relay in the book. I've got my copy preordered and will be giving it a read. You can preorder your copy below as well if you feel like giving it the time of day. It's also available on Audible as an Audio Book, which, by the way gives you a free 30-day trial and a free book when you sign up.
BlackBerry and Samsung
It's not often I read too much into any Seeking Alpha articles but when I saw the BlackBerry: Is Secu Tablet A Precursor To A Larger Deal With Samsung article I simply had to give it a read. Why? Because the article alludes to an even broader relationship between BlackBerry and Samsung with one of the key points being made that, due to the current working relationship status between the two, Samsung could provide its Exynos processor for BlackBerry handsets. That's not such a crazy thing and it's something I tend to agree with. In fact, I jokingly mentioned it in a few posts and then laid out some reasoning as to why in later posts as did many others in the CrackBerry Forums well before the Seeking Alpha post appeared.
Samsung wants Exynos out there in devices OTHER than their own and right now they don't have that. If BlackBerry is working closely with Samsung, who's to say it's only for their display technology? If Samsung took BlackBerry 10 in-house and made it work with Exynos it would be a stepping stone to broadening their own work and helping BlackBerry.
Plus, if that was indeed the case, BlackBerry wouldn't incur as much development costs as Samsung has a much broader team and an added bonus to that is that it would be less likely to fully leak. No one would be looking for BlackBerry stuff in Samsung's house. It makes a more interesting and compelling hardware story than 'just another BlackBerry 10 device except with a curve Samsung display'.
To be clear though, these are still just thoughts and opinions as to how BlackBerry could proceed and extend the Samsung relationship. There's still no real evidence of a swap to Exynos processors outside of a few mentions of Samsung in some really old BlackBerry 10 builds, presumably from testing, and the obvious fact that BlackBerry and Samsung do indeed have a working relationship that appears to be growing.
Still, it's worth thinking about and realistically we could fan the flames here all day creating a whole subset of rumors simply based on the Samsung relationship. Even the latest layoff news could lead directly back to Samsung taking over a lot of hardware items for BlackBerry if someone really wanted to push that rumor. It's not like they don't have the resources for it.
The Wrap Up
As noted in the opening, the timing of all this is interesting to me, and that's because it feels as though this small bevy of news all came at once. For weeks, the news cycle has been rather slow surrounding BlackBerry aside from device roll-outs to new regions.
Takeover rumors, layoffs, a new book, BlackBerry announcing their share program and more have all of a sudden appeared out of nowhere right before the long Memorial Day weekend and all rather close to the Q1 Fiscal 2016 reporting period. Almost like folks got bored and decided to create some additional chaos mixed in with the real news. Plus, it feels all 'we've been down this road before'.
But maybe that's just me and my rather skewed look at things. In any case, that's my mind dump on some of the latest news. I have no doubt you'll fill up the comments section with your own individual thoughts and opinions on everything that has been happening so, go ahead. Let's hear it. PS: I did elaborate more on a lot of this stuff on the BerryFlow podcast, you can catch that here.