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There has been a ton of speculation and rumors out there about the future of BlackBerry and it's likely not going to settle down until some real official news breaks. Even here on CrackBerry, we started a 'What If' series to discuss the hypothetical likelihood of some of the potential interests out there and while this isn't necessarily following the same format as those, there has been one name floating around my head for various reasons that I simply need to put out there to see if I'm alone in this thinking. In case you couldn't tell already by the headline and the image above, that name is LG. Let me share why.
There is an increasing amount of folks out there who believe BlackBerry has, for the last several years, been moving towards being a software company and hoping to offload their hardware portion to a different vendor. Even if it that was never really the case before, it seems more plausible now then ever. The argument is there that BlackBerry is losing money on their hardware sales and totally cannot compete with others these days and to help with that they need someone else building the hardware.
I often find myself agreeing with that notion and can clearly see it as a viable option, but then the question always gets raised, who would want BlackBerry? Previously I mentioned Lenovo but as I think about it more LG starts to fit a little bit more into that area. They're a massive company and in their Q2 2013 financial results, they posted $13.58 billion in revenue and $426.92 million in operating profit for the quarter across all their markets including Home Entertainment, Home Appliance and Air Conditioning and Energy Solutions divisions.
The problem with that? Their mobile business only posted revenues of $2.78 billion for the quarter. That's still an increase of 34.5% year-over-year with record sales of 12.1 million smart phones in the quarter with an operating profit of $54.37 million, which is up year-over-year but it's still down quarter-over-quarter due to lower average sales prices of phones. Needless to say, it wasn't the best for them but it's still an improvement and with their biggest rival being Samsung, I'm sure LG will take any gains they can get.
That leads me into why LG for BlackBerry. LG picked up webOS from HP although they have no intention of using it in smartphones. They're also digging into Firefox OS for emerging markets and Android continues to be their biggest market play right now but as we all know, that market is pretty much run by Samsung so it's hard to gain ground there. But with that being said, they're clearly not short on cash to throw around provided it helps improve their situation and striking a deal with BlackBerry to build hardware could potentially help them gain even further ground in mobile and gain something that Samsung is steadily working away on right now -- enterprise options and the BYOD sector.
Plus, a deal like that could allow BlackBerry to work on improving all of their software offerings including BlackBerry 10 without the worry of burning cash or the need to worry about building hardware. Speaking of that hardware, we already know LG can build fantastic devices when they really want to and the Nexus 4 is a prime example that they may be able to do it all for a low cost, after all LG builds a number of components that go into smartphones, most notably the displays which are one of the more costly portions.
To close this one out, I also have been giving some thought to the whole 'selling by November' rumor a bit and realizing that it kind of makes sense, depending on how you look at it and what could potentially be announced. Let's say for example my thoughts on LG do, for whatever insane reason, turn out to be true, and they do plan on working with LG, they announce it in November. That to me would kind of be a good announcement if it was perceived as being a good thing. It could add confidence for BlackBerry 10 sales going into the holiday season.
"Hey look, we've teamed up with LG and guess what? We're STILL not going anywhere and now we got balling amounts of cash! Wait till you see what we got coming for you!"
Can you imagine it? It'd be awesome to come out with some good news like that and it'd surely raise some eyebrows. Again, to be 100% clear though, I'm just totally riffing here and sharing my thoughts and none of this is based on solid logical information but I had to get these thoughts out of my brain.
Ultimately, it could be any company. As long as someone else is building the hardware, it gives BlackBerry some cash so they're not burning their reserves and allows them to continue building out software. LG really kind of fits in my mind even though there would certainly be some hurdles there, no doubt. I'm not trying to be dark and gloomy here and I hope this doesn't come off that way, I'm just thinking of how BlackBerry could continue to be great but in a new way like we've not yet seen.