What Microsoft buying Nokia means for BlackBerry

By Chris Umiastowski on 3 Sep 2013 12:19 pm EDT
2
loading...
0
loading...
92
loading...

This morning Microsoft made official what lots of industry observers thought was the only logical conclusion ... they bought Nokia’s phone and services business. They’re also picking up necessary patents and licensing Nokia’s mapping technology as part of a $7.2 billion deal.

In my mind this deal is confirmation that Microsoft felt it needs to entirely control the hardware end of the business in order to compete in the smartphone platform war. Apple already enjoys this benefit, and Google purchased Motorola as a potential move in this direction. BlackBerry has always been a platform controlled by one company.

If Microsoft needs to own the hardware business to succeed with Windows Phone in the long term, then I think it’s safe to say the same would be true of BlackBerry. Therefore, if BlackBerry can’t establish it’s own success as a vendor using BlackBerry 10, I can’t see any other company being interested in buying their hardware business. The Microsoft / Nokia deal should crush any rumors that BlackBerry is looking to sell its hardware business.

The Microsoft / Nokia deal should crush any rumors that BlackBerry is looking to sell its hardware business

If BlackBerry was to exit the smartphone hardware business I think they’d be shutting it down, not selling it. They’d be admitting defeat in consumer-facing hardware and consolidating their effort into behind-the-scenes work. They’d sell software and services for the enterprise, or they’d leverage their NOC to host developers’ applications in their secure cloud.

Will BlackBerry have to exit the hardware business though? I’m not sure. If they are to stay involved with hardware (and with BlackBerry 10), they can either fight in the global consumer + enterprise market, or they can abandon the consumer market and become a niche player in the enterprise market. If they do anything other than demonstrate full commitment to the consumer market they’ll kill any momentum they had getting developers to bring games and apps to the platform. If they decide they can’t build consumer relevance, they could conceivably niche-down, focus on the enterprise and possibly enable their devices to run Android in parallel, with access to Google Play.

As a quick side point, I like that Nokia is holding onto its mapping technology. Right now I think Nokia has some of the best maps in the business and BlackBerry’s mapping software hardly counts as an attempt. If BlackBerry stays in the smartphone business I’d like to see them license Nokia’s technology - something that probably is easier to do now that Nokia is out of the hardware market.

Does this deal mean BlackBerry is undervalued?

Microsoft is paying $5 billion for the hardware business and just over $2 billion for patents and licenses. The combined deal is valued at about $7.2 billion compared to BlackBerry’s market capitalization of $5.3 billion today. Some would say this must prove BlackBerry is undervalued, considering the installed base of customers for BlackBerry is much larger than for Windows Phone (including older BBOS devices).

BlackBerry, the stock, may be undervalued. But I don’t think the Microsoft Nokia deal proves this at all

I don’t buy into this argument. As my father always taught me, the value of something is exactly equal to whatever someone else is willing to pay. Microsoft is willing to pay $5 billion for hardware because they’ve now emerged as the #3 platform. Research from Kantar Worldpanel shows Microsoft Windows Phone now achieving about 1 in 10 smartphone sales in major European markets. There is obvious value for Microsoft to control the hardware business and possibly accelerate this growth. If gross margin on Windows Phone devices is $40 per unit (as widely reported) then what does it mean if net profit is $20 per unit (my rough guess)? I’d say it means Microsoft needs to sell about 250 million phones to make its money back. If you are the #3 player in the market then 250 million units over several years is realistic. If you’re a smaller player, it’s an insane expectation.

BlackBerry, the stock, may be undervalued. But I don’t think the Microsoft Nokia deal proves this at all. If it is undervalued it’s because the market fails to appreciate the potential for BlackBerry to emerge as a strong player in the global M2M market, or in enterprise data & security, or by selling its assets including its portfolio of patents. It’s certainly not undervalued just because Microsoft paid $5 billion for Nokia’s hardware unit.

To summarize, I think this deal changes the landscape. It changes the competitive dynamics. It’s a move that many people saw as obvious for Microsoft, and I absolutely believe it’s a smart decision. From a stock perspective everyone will now be looking at what it might mean to BlackBerry’s valuation. But make no mistake, this is not a positive for BlackBerry’s aspirations as a smartphone vendor. They have to step up their game big time or they need to step down and find a profitable way to compete in the market via software and services.

263 comments

maneck35

Just as I was thinking about this and opened CB, this gets posted.

thedustytaco

Lol just as I was reading this on Google news, I open cb and find this

Posted via CB10

tw1g_007

And I was expecting snarky comments. I open CB, read the article, read the comments and what do you know? Magic.

via CB10 (BB Z10 : BLK : OS 10.1) [ Follow me @EHZAY for BB News & Tech Updates ]

maneck35

Just opened the post, expected to find replies to my comment, and found this.

thedustytaco

Just as I was expecting reply comments, I find jerks

Posted via CB10

tw1g_007

And just as I was expecting comments relating to the topic and comments not bring snarky I find you a$$holes still at it.

via CB10 (BB Z10 : BLK : OS 10.1) [ Follow me @EHZAY for BB News & Tech Updates ]

burtd06

You nailed the analysis on this one. Not good for BlackBerry.

Posted via CB10

birdman_38

Good for Nokia. They're up 30% this morning!

Yasch22

Nailed it? Too many questions and issues are not dealt with. E.g.,
1. The huge drop in the average selling price for Lumias last quarter, all the way down to $206. It's not that hard to pick up market share when you're selling at a per-unit loss.
2. $40 margins with an ASP of $206?? Seriously? There are ways to make gross margins look good, I suppose, but when all the bills come in Nokia is taking significant losses.
3. Can MSFT sell 250m phones in the next three years? That's 83m per year, or ~21m per quarter. To get their $20 net profit per phone, they'll obviously have to get that ASP higher than $206. But the main way Nokia bumped up sales from 5.8 to 7.4m is -- again -- by dropping the ASP from $249 (Q4/12) to $240 (Q1/13) to $206 (Q2/13).
4. The $250m per quarter MSFT was giving NOK to keep the company on board needs discussion. Nokia's losses were significantly mitigated by these payments.
5. What happens to Nokia's customer loyalty now that MSFT has total control?
6. Hasn't MSFT, by fully committing to control of the hardware division, effectively diminished the motivation of other hardware manufacturers to license their OS?

Paunngaq

You pose some thought worthy points and questions, I wish Chris would reply to your post.

Cheers

Posted via CB10

Sandy Sprong

A contributor on Seeking Alpha makes the argument that we should maybe spend less time counting units sold and focus more on dollar share. Nokia has surpassed BB in Q2 in units sold but has fallen well back in revenue per unit. In the last 3 Qs BB's ASP has gone from $231 to $319. NOK has gone from $249 to $205. A slippery slope.

Its much easier to drop prices than it is to raise them, especially if you're still offering the same product. Will consumers pay more simply because the product is now owned and offered by MS?

This is a good read: BlackBerry: http://seekingalpha.com/article/1668902-blackberry-market-share-better-t...

dejanh

Straight shooting article. Well said. Now let's hope BlackBerry does the former and commits instead of the latter and folds.

Posted via CB10

birdman_38

I'm extremely disappointed at how long it took CrackBerry to post anything about this when it has been so highly discussed in the forums since last night. There has been at least one article posted to all of the other Mobile Nations sites before CrackBerry. Instead, we had the usual faire of lesser known app and game reviews, and a theme roundup for legacy. To not post anything about a game changing development with BlackBerry's biggest competitor is puzzling. I'm starting to get the impression CrackBerry doesn't care about the business side of things for BlackBerry, and is reflecting the corporate attitude that "everything is fine".

Chris Umiastowski

Sorry dude ... had to take my kids to their first day of school.  

birdman_38

Not picking on you Chris, sorry if it came across that way. CB could have at least posted something pointing to the sale and promised analysis from you later.

jic999

People should read a good book called the " The Wait " by Frank Partnoy an investment banker and a prof in California. He knows the Dot com and mortgage fiascos very well. The Best decision is not the first mis-information tweet but the best, accurate and good pièce of information. Stop the Blinking and Wait for a change !

Posted via CB10

route664

thanks for all the articles chris.. i guess people sometimes forget that the people that write for crackberry have lives outside of crackberry..

just goes to show you how influential crackberry is..

birdman_38

My criticism wasn't directed at Umi. Please stop making it out to be.

Kevin Michaluk

See my post below. I don't disagree with you.

Chris Umiastowski

I take no offense to your post.  No worries.  We didn't get the headlines up fast enough.  Fair feedback.

morpho4444

on tuesday? whaaaaaaaaaat?

thedustytaco

Have you ever heard of labour day? And more note able the "labor day sale" on cb??? Lol not to mention I go back to school on wednesday( tommorow) cuz I'm in high school and grade nines are freshman. They get a day head start to get a look around and get accustomed to the high school environment

Posted via CB10

thedustytaco

What I meant to say was no school on labour day therefore school pushed back to Tuesday xD

Posted via CB10

BB10_fan1

Hi Chris, this is going to sound crazy but could Microsoft need BlackBerry as well as the phone business from Nokia in order to really compete against Apple and Google (with Samsung being the real target)? So the Nokia portion provides the control of hardware and low cost production (relative to at least BlackBerry). I know they have their own software but they may be missing some enterprise security features and skype really hasn't become the communication tool that I think BBM could be). Perhaps this analysis is yet to come? Thanks

Nathend

What ? I think I can safely say that there is NO hope in hell that MS will purchase BB in any form, not unless it is a FIRE sale.
Why ? I will tell you .......................
Microsoft Buys Skype for $8.5 Billion <----------- this right here.
Also it really is an eye opener on how the worth of some of these Company's are skewed in relation to Time. I mean It is really Mind Blowing ! how Nokia dwarfed Skype in terms of Company and $ worth only to be sold for peanuts compared to today s times.
So Microsoft Buys Skype for $8.5 Billion and Microsoft Buys Nokia for $7.2 Billion, Less then Skype, UNREAL.

I highly doubt that BB will be sold for more then Nokia , BB users will not be happy with this but I doubt it.
Even Cris is realistic if not somewhat leaning on the positive side of things.

" I don’t buy into this argument. As my father always taught me, the value of something is exactly equal to whatever someone else is willing to pay. " and " But make no mistake, this is not a positive for BlackBerry’s aspirations as a smartphone vendor. "
And that is why this is a Huge for BB. MS intended to buy Nokia a long time ago, so for them it was a Win / Win situation for the investment to be partnered with Nokia.

WillKhalifa420

If they didn't care, they wouldn't be here.
Most of them of shareholders and I know Kevin loves the *#@$ out of BlackBerry......

Poor comment.

Posted via CB10 on my BlackBerry Q10 on the Rogers LTE Max network in Toronto

WillKhalifa420

Chris cares too..... see he was taking his kids to their first day of school

And oh btw....

BlackBerryKeepMoving :)

Posted via CB10 on my BlackBerry Q10 on the Rogers LTE Max network in Toronto

malluco

dude, is not only the crackberry that do this, the media in general. Who is a fan of BlackBerry should help the company to get up, have a portal of Blackberry in Brazil and is what I do, I try to convince my readers not largarem users mark, showing that they did not die and will not die .. but here lately it has been different.

Kevin Michaluk

To be fair.. I thought @bla1ze called dibs on this to get the news up last night, and then Umi would follow up with analysis.  I was shocked when I woke up this morning and saw we missed getting the "news" up... but now we're following up with the analysis, etc.  

Jtaylor1986

What about the from the editors desk that is never up on time lol

Optimus4

You need to start an armchair CEO for crackberry in the forums for all the complainers. If it wasn't on mobile nations site last night problem. On crackberry no big deal. I would only expect umi's analysis and I wouldn't expect it right away. Would want him to get it right rather than fast.

Also birdman_38 complains about everything.

birdman_38

You're entitled to your opinion, I guess.

Unbiased Tech

You were expecting a BlackBerry fan site to report news quickly on Microsoft? They really didn't have to post anything on this at all. I'm glad they did, but the only reason this is somewhat related to BlackBerry is because they are competitors.

Posted via CB10

jic999

Incredible Birdman ! Your still in " Schools ....out ...for ....Summer " mode !!

Posted via CB10

BlackBerrari

Hehehe...

Posted via CB10

Drmoe

This sucks for bb. Regardless I would take my Z10 over any Nokia or Microsoft phone any day. Best phone ever!

Posted via the best phone ever. The white Z10.

nova scotian

Same hear!

Posted via CB10

Peter Lee4

"But make no mistake, this is not a positive for BlackBerry’s aspirations as a smartphone vendor" I am sure this is not a positive for Blackberry, but I don't see it as a negative either. In fact, I can't see how this makes any difference at all right now.

abwan11

I do believe it is very positive for BlackBerry, Nokia hardware, like blackberry, was considered worthless, not anymore

Posted via CB10

Flip4Bytes

Yes, but I think his main point was, now that WP purchased up a hardware manufacturer and they are in 3rd place, then who would be interested in buying up BlackBerry's hardware section? WP was pretty much the last company to need a hardware section, so what's the value for BlackBerry if noone needs it? Everyone else is content with their own means.

- Developer of 'Web Design Cheat Sheet' for BB10 (Posted via CB10)

Nathend

Exactly. You can forget Sony, they already have a Team/ Division that build there phones. Maybe they might be interested in BBM but not HdWare , and that is a long shot.

JakeTheCat

Everybody seems to be missing the new and most obvious buyer for BlackBerry that has emerged out of this (and it's not Microsoft).

Nokia was on a burning platform a few years ago with its old OS and its jump into a partnership with Microsoft did not provide the boost it needed. Nokia found itself with the worst of both worlds: no OS of its own and a complete reliance on another company's OS that wasn't gaining traction fast enough.

Nokia has a history of reinventing itself and it tried to again with Microsoft and it didn't work. Well, it's time for Nokia to try again. How? Nokia is planning to sell its dumbphone and smartphone hardware to Microsoft and will be left with a bunch of cash, no hardware, no software, but - importantly - a ton of patents and mapping assets. What should Nokia do with them? How about buy a hardware maker (with a large complimentary patent portfolio) that has a great and modern operating system so that Nokia can have an OS to call its own again? In one fell swoop Nokia can swap the old and struggling Nokia handset/Microsoft business for a shiny new Nokia/BlackBerry business. It would be a huge step up for Nokia, playing to all of its strengths, and the price seems about right.

bigstory

This...

Posted via CB10

oddboy

what about the board saying niche player is the way to go? is that it? is it over?

http://venturebeat.com/2013/09/02/blackberry-director-says-it-can-surviv...

textmint2013

Yes. I had read this in the WSJ too. Surprised to see that no one picked up on this story. Actually blackberry is in a pickle here. The big three are the big three. There is no place for a fourth platform player especially the way bbry has gone about it. Still though hoping against hope that something good happens.

Posted via CB10 from BB Z10

Flip4Bytes

It's funny too, because not one person that I have talked to has actually LIKED the Windows Phone experience.. My cousin actually just left WP8 for a Z10. I've talked to many people who have never even used BB10, and they all seem to come to the same consensus, that Windows Phone is nothing special. The only thing that Windows is doing well right now is marketing. They are marketing like MAD, and they have some good commercials too. Really sucks at the end of the day, because it's such an inferior product, it doesn't deserve 3rd place.

Bsbudd

I think this really depends who you ask. I'm currently in Puerto Vallarta, Mexico for work and if you ask professionals about Blackberry they dismiss the brand and show me either the Windows phone, iPhone or an Android. I was curious and visited one of the biggest carrier stores (Telcel) asking if I can see some of the new Blackberries and they told me they don't stock them. If I want one I should buy it from the National Telcel Website. Yet the windows 8 phones are available.

Since I'm here I have not seen a single NEW blackberry. I have seen plenty of Windows 8 phones though.

robdob123

Sort of reminds me of the once war between OS2 and WinNT. OS2 being a far better, true multi tasking system. Yet msft won, clearly a case of marketing and false perception. The big problem is bbry needs some BIG BUZZ, Alicia Keys hasn't seemed to have done anything, no BUZZ. Bbm needs to be released with all the. Features, not piecemeal.

GeoYeo Free Local classifieds - Built for Blackberry 10, if you like it please Rate It and Share it! http://appworld.blackberry.com/webstore/content/29691888

fteoOpty64

MS really has no choice considering that Balmer is leaving to allow WP to be "set adrift" when run by Nokia. Taking back the whole platform makes snese to MS but it does not guarantee success. It means they can spend more on the specific parts of the company where they see fit.
BB should get milage from this acquisition since it shows a complete software/hardware combination is very strong/valuable. And BB is but has to market better and cut prices mre aggressively to match the market expectations. Older BBs are still have demand when their prices drop. The built quality is there compared to the cheaper models of other brands. The OS is also no slough and miles better than WP8.

jgrobertson

The last sentence of the OP post says it all.

Posted via CB10

Graheem

That last sentence is words they have needed to heed for several years now, but they just keep dropping the ball.

scalemaster34

I really like what Microsoft is doing and can see them carving a big chunk out of the smartphone market.

But I think that without some Big Announcements from BlackBerry about 3rd Party Developer Support - BlackBerry is not going to be a name associated with hardware in the future. Don't believe they can scale down and still keep devices in the competitive rage for enterprise customers. And right now I think all of the uncertainty is killing there MDM prospects.

fearmantis

BB Z10 is the best!

BB Z10 Rocks!

dejanh

That may be so (I own a Z10 and yes, it is the best phone out in the market right now despite lackluster app support) but without BlackBerry seriously committing to the platform the entire OS, all of the progress it achieves towards the future of smartphones, etc., well, it will all be lost. It really is do or die time right now. I just hope BlackBerry choses to do, not die.

Posted via CB10

textmint2013

It's most likely going to die unfortunately. I love my Z10 and wanted a Q10 but bbry priced it outcome of my reach.

Posted via CB10 from BB Z10

rolojr1

Absolutely agree with you.

Posted via CB10

rolojr1

I'm sorry I agree with Dejanh not Textmint2013.

Posted via CB10

BBHermes

My sense is that BBRY is waiting to get 10.2 and the Z30 out of the door before going on a marketing blitz for the holidays. They've been holding back their resources in such a way that I'm thinking/hoping that something strategic is going on. Maybe they didn't want to commit too many marketing resources until they had all their Phase-A ducks in a row, or waste resources over the Summer. Maybe the Sprint ad is the start of something...

So I'm holding withholding judgment till January on whether BBRY has a good chance of turning things around in North America.

Kingkracker

Good point. I feel something is up their sleeve too

Posted via CB10

crackbb10

I don't think have they have much up their sleeve... but I dearly hope they prove me wrong... can't wait for BBM though... It could be the start of a resurgence...

From the Z...

BlackBerrari

I think the same, though it's hard to keep believing...

Also, though I'm not a dev, but allowing to run android ports with jellybean 4.2 should mean that it will be better for them to port directly their most actual android app? I can imagine that a lot of big names, especially companies for whom an app is a complement to their business (newspapers, banks, whatever) but also pure online companies like Instagram would prefer porting their most actual android app rather than having a 2.3 version and the newest one live on two different OS platforms...

Hope thats only one of the lots of aces need to have in their sleeves...

- 10.2
- BES (though, having the need to file an official press release for 2000 devices and full BES adoption at Univision gives me serious headache... also, some banks here in switzerland are starting to allow the use of Good for Enterprise, it seriously troubles me knowing that swiss banks traditionally have high level security and "secrecy" needs... but still, the fact that my working station is finally migrating at this very moment from XP to Win7 shows that adoption of new technologies is quite slow... but has BlackBerry the time to wait...)
- BBM cross platform
- BBM channels, if marketed properly as a sort of Twitter/FB fusion to address customers with a higher power of purchase
- new freakin devices ;-) Z30, a slider...

Sorry for hijacking your comment... but my lil armchair CEO just went through me!

Posted via CB10

birdman_38

The question is where does this put Microsoft as a potential suitor for BlackBerry? Purchasing BlackBerry still makes sense, as Microsoft would be buying into enterprise and carrier relationships...two huge factors they'll need to succeed.

Would 2 acquisition votes before Microsoft's shareholders be too much?

jstirtzinger

I don't think MS was EVER a potential suitor and this definitely means they won't be...too much product and strategy overlap/conflict. Now HTC, or Sony makes a lot of sense since they have no ecosystem of their own.

sk8er_tor

I think even Samsung. BlackBerry holds many patents that could be very valuable for Samsung. Instead of wasting billions of dollars in the courts, they can simply buy BlackBerry and make that problem go away. Plus, they won't need to rely on Google and Samsung has the ability to get big apps and sell lots of phones without Android. If you look at it, it's Samsung that's carrying Android and the rest of the players are nobodies, sort of like how Nokia is a nobody with the Symbian OS even though they sell millions of Symbian devices.

birdman_38

The rest of the players are slowly but surely gaining ground on Samsung, it's just that nobody will match Samsung's dominance in Android.

textmint2013

Good point. It is possible for ms to gobble up bbry as an acquisition of bbry comes with a lot of pluses. Let's see.

Posted via CB10 from BB Z10

Kingkracker

I don't think this is a negative for BlackBerry. I see it as affirmation that the hardware and software to be together are key. I do see however that BlackBerry needs to step up the marketing (which has been the perpetual issue) . I don't like Windows phones. They don't compare to the BlackBerry 10. My boss has a windows phone and hates it. He is the director of IT. However people can't know this by a Vulcan mind meld they need to be shown and enticed.

Advertise dammit!

Posted via CB10

WP8now

I had BB for a long time recently switched to Lumia 920 WP8 and love it. It is a great phone experience and others will also find this out in time. Anyone tired of waiting for BB to do something and do not want to be sheep with iOS and/or Android, will love the WP8 alternative. Its not giving anything up to take this path, but it is something new and fresh.

Demandred7

You know what a great phone experience is - BB10. I would not call it nothing. I have seen so many good games come on BlackBerry World, the OS is way better than any previous BlackBerry OS. Abandoning BlackBerry now in what appears to be their time of need feels like treason to me. Good that you are happy, but, Blackberry's biggest failing is marketing and PR. They have been branded as dead and not innovative and like sheep, the public has largely bought into it hook, line, and sinker. Sorry to trash your choice, but, it just touched a sore point for me. Everyone is entitled to a choice, I just don't understand how people don't realize how good BB10 is.

thawkth

Did you just call changing platforms TREASON?!

You might need to go outside and take a walk...

Demandred7

I said that is just how I treat it with respect to my own choice. I also said that everyone is entitled to a choice.

travaz

Wow BlackBerry is a fantastic os. I have no argument why that statement. However to get full productivity I had to go and purchase a nexus 7. It works well and in some ways better than bb 10 . its the lack of apps that made this needed. I am thinking of buying the Droid Maxx to see if I like it. The true test of BB 10 is to try something else and see how it measures up. If I have problems I can go back to the Z 10. As they say of you truly love something let it go and see if it returns. After all CB fans, and I am one, tend to be a bit blinded by their love of BB

Nathend

Wait 3 weeks or around there. NEXUS 5 is on it's way and you'll be blown away.
At least wait and try the N 5 and Droid Max and see, you might be happy you did or you might not like either but this is the beauty Choice and open thinking. That's why I will NEVER be loyal to 1 Brand. Not for anyone or anything, I'm happy to like what i want ,when I want.

robdob123

@wp8now

Are you here to canvas support for wp8.

GeoYeo Free Local classifieds - Built for Blackberry 10, if you like it please Rate It and Share it! http://appworld.blackberry.com/webstore/content/29691888

Sandy Sprong

One of my co-workers walked in with a brand spanky new Z10 this morning. Seems he didn't share your enthusiasm for WP8 when he dumped his HTC. Just saying...

Kurt Windibank

BlackBerry has a rich patent portfolio...mist notably it's ECC encryption patents.

BlackBerry also has a great potential in QNX for automotive...landing three significant contracts in the last two weeks....confirming their position as the largest and fastest growing automotive OS.
BBM cross platform will soon debut and if they can garner the large user base it's value jumps overnight...eyeballs equal dollars.
BES10 MDM has great potential as well in enterprise.

BlackBerry needs a partner with deep pockets if it is to fight the big 3. If not...sell off the jewels to another player looking to beef up.

Jimmy Choo1

If anything product I would root for, it would be Microsoft to succeed and Nokia has always been my favorite handset growing up.

Posted via CB10

crackbb10

Funny... I always loved the older Nokia phones when it was just phones (3310, 3330)... Then I fell in love with Samsung when it became phones with media (D500, 600, 900)... Then the iPhone came out and I loved it... but I chose BlackBerry (8520, 9700, 9780, 9900)...

All the manufacturers I admired in the past are now the biggest contenders against the one smartphone that I came to love and appreciate the most...

From the Z...

Notcho

It means smaller device companies like Sony and BlackBerry gotta team up and take down the rest.

Sent from The Legendary Zed10

mzconsulting

Read that MS had no choice if they wanted to keep Windows phone. Nokia was at risk of bankruptcy and may have been thinking to move to Android. Now MS has no risk of .losing its major supplier.

Posted via CB10

kojita

This means tougher competition from the principal rival WP8...not going to be an easy one, Nokia still has a strong reputation in terms of quality build. BB is fine but not outstanding (the OS is tough and of course the KB). If WP8 incorporates and integrate PC windows 8 and tablet and manages to have something stable (unlike W8 at least on my PC) then it is going to take BB a lot of creativity to stick out. Probably the M2M is truly where we should shine and have a competitive advantage having QNX built in so many systems.

J Johnstone

For a minute there I thought I was on one of those super negative (towards blackberry) sites. Panic is not the answer - the product is excellent and just needs good marketing/pricing. Microsoft was never likely to buy BlackBerry, having said that what keeps them from buying blackberry as well.

Posted via CB10

digicloud

Another nail in the coffin for CashBerry, unless they can step up to the plate. Something they have not been able to do to date. New management, New plan and New direction is needed badly.

Superfly_FR

Chris, thanks for the input.

jbmcunanan

The other companies already made their move. What's yours, Blackberry? Keep moving!

Posted via CB10

BB10fanatic

Thanks Chris, for admitting that this creates another challenge for BBRY. As I type MSFT is at 31.41, buying 32 calls, a bounce is all I need. F*ck both of these companies, they are just investment plays.

malluco

I think BB should seize this moment to boost sales, and enrich your platform operating system, enjoy that Windows users have the back foot with the company owner and who know that Nokia may possibly disappear from the map because of this management of MS, but the BlackBerry profiteth this flow, this transition to leverage, better manage content, launch the ASAP BB10.2 and improve their resources and their perception, seize the moment to make MARKETING flowing quickly and with positivity. Enjoy and improve the Playbook for creating stood Dengue, this could be the re-start

pedrogari

I live in Spain and my company switch to BB10 in April. From then I sow only few BB10 phone around but last fee weeks 10 of my friend and people I know bought New blackberry and severely other consider to buy. In Spain I didn't sow one commercial of BlackBerry and we under bombing of Samsung ads. So actually I start to see many BB10 device atround, more than ever, so I think blackberry still have a chance. People get impressed whit BBm

Posted via CB10

Superfly_FR

[Armchair C.E.O section]
Enterprise.Enterprise.Enterprise.
The best way to put devices on the wild, even with low GM.
Loyalty program costs 10% V.S conquest.

This should be nailed. Printed in red capital letters in every BB office.
* This "niche" isn't poor. It's a rich niche *
Moreover, probably the best lauching pad for consumers "evangelization" and recovery.
[/ Armchair C.E.O section]

@Chris : I don't believe they have to abandon the consumers to take profits in the enterprises.
But they can *focus* (expenses, marketing) on that part of the business and let the consumer part stagnate for a while.
I'm not sure MS got anything better in the enterprise segment with NOK acquisition. And until I read an official statement that BBM (the next-gen BBM communication tool in Enterprises IMHO) will not go WP, I'll stick to my crazy theory MS/BB alliance (whatever we call it, partnership, licensing,joint venture, co-branding ...). And this acquisition doesn't change much, still IMHO.

Chris Umiastowski

Yeah, I like the way you put it better than how I put it.  If BBRY is going to make hardware they may as well offer it for sale everywhere ... they just might not be able to justify promotion dollars towards the consumer channel.

I have a hard time understanding how they can do hardware as a niche player at all though.  You are either in or out of the market, not sorta kinda in as a niche player.

Who is a successful niche player in smartphones?  I can't point to a single case.

Kriilin Namek

Chris, what do you think of this scenerio: BB keeps making h/w for the Govt and Enterprise, complete with it's supply chain security in place, (FIPS 140-2) and licenses the OS to another h/w vendor for consumer? They could still compete in consumer, and although they'll have competition within their own OS, I think overall market share would increase.

thawkth

I think Microsoft should partner with BB in an arrangement similar to what they did with Citrix and the RDP protocol.

Citrix was always allowed to stay a step or two ahead in remote desktop/applications, Microsoft gained the best in tech, and both companies have benefited hugely from the arrangement.

See here:

http://en.wikipedia.org/wiki/Citrix_Systems#Microsoft_relationship

Microsoft could learn a thing or two from BES and Blackberry's enterprise experience.

Superfly_FR

Thanks for the response Chris, and it's fair to say I can wear rosy glasses sometimes ...
Still I believe BBRY management is making its own the "do different" and we might see here something we've never see before, like a mixed strategy that could match with both "wait and see" and "let's rock this town to the max". For Rock'n'Roll, in the Enterprise sector, there might be more than one "friendly candidate" to team with, against the current duopoly.
"Even clowns can be right sometimes" and I believe T.H and F.B have been treated like "chicken of the year", just because they kept their mouth shut - how hard this is - against the flow of brilliant "analysts" drooling and Armchair CEOs (like me) declaring they were ... clowns.
He laughs best who laughs last. I believe MSFT/BB are going to ally, as NOK is only part of the move ... And only one word from MSFT or BB confirming that will ... [oh, enough with fiction] :D

P.S: That's my 2 cents; but I count in Euros, that's ~30% more than USD ;)

sf49ers1980

I feel this may be just another nail in BlackBerry coffin.
I still see people believing that BlackBerry has something up their sleeves but do you not all think it's just too little too late?
The chance to capitalise on other platforms short falling has come and gone. The things that BlackBerry does so much better are getting smaller with every new competitive phone that gets released and they continue to fall further behind with apps and games.
It kills me to say it but I see no way back from this.

CB10 on my Z10

Demandred7

Thanks for the ray of sunshine. Not.

Naija_berryfan

What if a Chinese company buys blackberry, just a thought and let's not forget they have the cash.

Posted via CB10

Alphax45

Canadian (and USA) government would never let that happen.

Superbuddy2007

Let's not forget that Blackberry is also known for its security. That doesn't go too well with the Chinese.

MGDania

This may turn out to be good news for BB. Everything Microsoft gets involved with becomes bloated, slow to respond to market changes. My company runs 4 MS enterprise software systems that are supposed to be integrated. They are, barely, but only after we pay MS consultants loads of money to make them work. Every time there is an update to one of them we have to shell out more money. So if they try to make their phones work with their enterprise solutions , good luck to anyone that signs up.

BlackBerry being smaller, and getting smaller by the day, is more focused and will provide a more stable, secure and reactive solution to the enterprise customer . The constant evolution of BB10 is the proof of this. It has come a long way in 8 months and will take another leap when 10.2 is out.

MS strategy is to only patch its OS. Any improvements in functionality comes as a upgrade and a hefty charge.

Size didn't help the Titanic.

BlackBerry keep your feet moving, Don't stand still and go toe to toe.

Posted via CB10

Kristijonas

I think this is a good news, maybe it will kill the speculation of BlackBerry sale ;)

Posted via CB10

Dj Teknision

I don't see blackberry just folding. They have plenty support in other countries. It's just the US were the real issues fall.

DJ TEKNISION (All mix No talk) Podcast BBM Channel C001208C3

web99

It is a very smart move by Microsoft to acquire Nokia. Logically it gives them total control over the hardware as well as the software side of things. For Nokia it now means that they will have the backing of billions of dollars from Microsoft. It's a win win arrangement for both companies.

Posted via CB10 from my spectacular Z10

kenteeet

It might just be me, but this seems like there is just one Giant hardware manufacturer still could be looking for some software to "own"...Samsung is going to be the Android third wheel at some point, Windows is going to push their own hardware now, leaving Samsung paying heavy licenses or even better BB10 on Samsung hardware....that could be tasty.... here's hoping for a partnership and not a sale, but they make the most sense if they are interested.

Posted via CB10

xamdam

I do hope Samsung does partner with BlackBerry and we see a trend of android on BlackBerry devices and also bb10 on some Samsung devices.

Just think of having bb10 on a s4 or s5 or s6 and having android on z10 or z30 or z20 or z40.

I would love to have the option of loading android OS 4.3 fully onto my z10 and switch back to bb10 somehow a dual boot would be awesome.

In order to have a dual boot there has to to be a New Rome developed or Have two Roms one for bb10 and other for android 4.++++

Posted via CB10

neoberry99

I thought MS would buy Blackberry but after reading Chris U post, I'm staring to think like you kenteeet; Samsung is the ticket. I believe Samsung is working on their own OS so why start from scratch when you can team up with BlackBerry?

Maxey05

It means Microsoft wants nothing to do with BlackBerry and now they have tougher competition!..

xamdam

I do not like any Windows Nokia Device and I will never buy such an ugly looking OS which is windows 8 dummied down to a mobile device.

I do not like windows 8 on any platform, I run windows 7 on my Laptop purchased it that way, cause I will never use windows 8.

If these mobile windows 8 devices are anything lime the PC version, then ppl will get malware, viruses and a million updates that bloat the device up to a slow piece of garage (wait it already is garbage).

Posted via CB10

Mike_Luchia

BlackBerry has always had, and still has one problem only and that's a substantial response to negative press of their BB10 products. Other constantly tear BB10 down and promote the hell out of their products and BlackBerry just seems to sit back and take it. While I still want to see BlackBerry "keep moving" I'd much rather see them kicking some proverbial advertising butt!

Do that and the apps will come.

Mike

Demandred7

YES! BlackBerry is acting like a boxer on the ropes and not returning any punches. BlackBerry needs to go on the offensive and make every bit of marketing and PR count. They need to show that they aren't going to go down without a fight. They need to bloody some noses. BlackBerry needs to show that it isn't going to be bullied.

walt63

I like the way you think.

robdob123

+1000000

Like some political attack ads.

GeoYeo Free Local classifieds - Built for Blackberry 10, if you like it please Rate It and Share it! http://appworld.blackberry.com/webstore/content/29691888

birdman_38

Agreed. Not necessarily attack ads, but stand up and demonstrate what they're good at.

fragment137

I still think a BlackBerry/Sony partnership would be a strong competition for GOOG/MSI and MSFT/NOK.

Notcho

Agree, plus exclusive apps for ps4

Sent from The Legendary Zed10

Mel25

Plus 1

Posted via CB10

Kriilin Namek

Agreed, would also give BB a much needed and instant retail sales/service presence.

playpen007

Blackberry employees have to work very hard and smart until smoke coming out of their heads to come up with something special that benefit the smartphone user greatly and put their competitors in shame or otherwise, they will continue to struggle. Easy days are over...

neoberry99

I totally agree with you.

Kriilin Namek

I think they've been already, but who the heck knows about it with their goofy marketing?

mikekeyser

News like this continues to kill my arguments for purchasing BES 10 and the new MDM. The best product on the market, yet virtually impossible to sell with so much uncertainty. Beyond frustrating...

crackbb10

You can use BES10 without a BlackBerry right...?

From the Z...

mikekeyser

Yes you can, but you'll have a tough time selling it when it appears that the company may or may not be around to support it...

CarbonKevin

If there is one thing Microsoft is good at, it's mediocrity. Another is ignoring the needs of customers and shoving what they want down our throats. See also: Windows 8. Finally, security. Did you know there was a vulnerability introduced in Windows 3.1 that wasn't fixed until Windows 7? 17 years undetected and unadresed.

Their current corporate culture, well entrenched amongst their 95,000+ employees, virtually ensures they will never be a leader, or even a threat in the handset business, where innovation is king, security matters, and a software update is should bring new features, not just fix old ones.

Big deal that some stock prices have jumped. Wall Street is notoriously bad at reflecting tech trends and rewarding good corporate management. Today's stock prices will settle down in a week or two, and everyone will be scratch their heads wondering if it was all a dream.

Posted via CB10

Parthiv Shah

Hey Chris correct me if I am wrong. Blackberry's Hardware business contributed 70% to the total Blackberry revenue. So conservatively assuming a sale of $12 Billion can one say that Blackberry's hardware is valued at around 4 billion USD assume a similar valuation as what Nokia got paid by Microsoft. So why are analyst saying that Blackberry's hardware value is "0"? Am I missing something.
With that said I would be more than happy if Cisco, Oracle or Apple or HP buys Blackberry for a total sum of $12 Billion at this juncture. Around $23 USD per share.

Chris Umiastowski

The folks who say BlackBerry's hardware business is worth zero are probably looking at it with the perspective I shared in this article. Who is going to buy it? What value does it bring to a buyer? If BBRY can't make BB10 successful owning the hardware then how can we expect a buyer of the hardware piece to make money? If we can't, then the argument of it having zero value is easy to float.

fedakd

Nokia has not been profitable on its Lumia hardware sales. It reported a loss of $0.08 last quarter. It also captures a smaller portion of the smartphone revenue pie than BlackBerry does as it typically sells devices for a lower cost basis. The folks that are saying BlackBerry's hardware business is worth zero have zero thesis to their argument.

No one thought Nokia was going to get bought out, so the hardware was also "worthless"?. These analysts, always getting it wrong. I certainly hope Pierre Ferragu remembers to lock the doors at his home now...

http://blogs.marketwatch.com/thetell/2013/09/03/nokia-becomes-latest-sho...

Chris Umiastowski

There is a huge difference between NOK and BBRY hardware businesses. NOK has (now had) Microsoft depending on them. Nobody other platform vendor is depending on BBRY to manufacture hardware. So there is no natural buyer for a BlackBerry hardware business, while there was always a natural buyer for NOK. Ferragu may not have expected it, but practically everyone else in the tech world expected this to happen at some point. Right from the days when Elop was put in charge and he made the strategic bet on MSFT, people were saying it was inevitable that the courtship would lead to marriage.

Nathend

Exactly ! MS had that intention a long time ago. This just didn't happen over night.
Again I'll say it.
Microsoft Buys Skype for $8.5 Billion
Microsoft Buys Nokia for $7.2 Billion ( Nokia! sold for less then Skype! unreal )
Anyone thinking MS will support BB or BBM is our of there Minds. Not gonna happen folks.

sidhuk

"What value does it bring to a buyer?"
isnt that the case with every purchase/Value? so why make it sound like half a glass full only for blackberry?

sidhuk

I wrote down "half a glass full" purposely, contrary to your latest articles about blackberry half a glass empty.
Note: MS hasn't purchased patents from Nokia. Please look in to details.

cgk

Yeah they have - they have licensed some and purchased others - the purchased patents are included in the price of the hardware division - around 8800 according to the Press Conference ( there was an earlier press release that only mentioned the licensed ones but it was incorrect).

sidhuk

here are the details of the agreement. My issue is with Chris seeing everything for blackberry half a glass Empty and I would like to know why? if he is talking about the "What value does it bring to a buyer?" then it can also work both ways for Blackberry not only as a down side. There may be a buyer for which Blackberry could work better than MS-NOKIA Deal. There is already enough Gloom and Doom out there however, if Chris is creating Gloom and doom for Blackberry then he has to explain in little more details IMO.
http://www.businessinsider.com/microsoft-buys-nokia-devices-2013-9#ixzz2...
TERMS OF THE AGREEMENT

Under the terms of the agreement, Microsoft will acquire substantially all of Nokia’s Devices and Services business, including the Mobile Phones and Smart Devices business units as well as an industry-leading design team, operations including all Nokia Devices & Services-related production facilities, Devices & Services-related sales and marketing activities, and related support functions. At closing, approximately 32,000 people are expected to transfer to Microsoft, including 4,700 people in Finland and 18,300 employees directly involved in manufacturing, assembly and packaging of products worldwide. The operations that are planned to be transferred to Microsoft generated an estimated EUR 14.9 billion, or almost 50 percent of Nokia’s net sales for the full year 2012.

Microsoft is acquiring Nokia’s Smart Devices business unit, including the Lumia brand and products. Lumia handsets have won numerous awards and have grown in sales in each of the last three quarters, with sales reaching 7.4 million units in the second quarter of 2013.

As part of the transaction, Nokia is assigning to Microsoft its long-term patent licensing agreement with Qualcomm, as well as other licensing agreements.

Microsoft is also acquiring Nokia’s Mobile Phones business unit, which serves hundreds of millions of customers worldwide, and had sales of 53.7 million units in the second quarter of 2013. Microsoft will acquire the Asha brand and will license the Nokia brand for use with current Nokia mobile phone products. Nokia will continue to own and manage the Nokia brand. This element provides Microsoft with the opportunity to extend its service offerings to a far wider group around the world while allowing Nokia’s mobile phones to serve as an on-ramp to Windows Phone.

Nokia will retain its patent portfolio and will grant Microsoft a 10-year license to its patents at the time of the closing. Microsoft will grant Nokia reciprocal rights to use Microsoft patents in its HERE services. In addition, Nokia will grant Microsoft an option to extend this mutual patent agreement in perpetuity.

In addition, Microsoft will become a strategic licensee of the HERE platform, and will separately pay Nokia for a four-year license.

Microsoft will also immediately make available to Nokia EUR 1.5 billion of financing in the form of three EUR 500 million tranches of convertible notes that Microsoft would fund from overseas resources. If Nokia decides to draw down on this financing option, Nokia would pay back these notes to Microsoft from the proceeds of the deal upon closing. The financing is not conditional on the transaction closing.

Microsoft also announced that it has selected Finland as the home for a new data center that will serve Microsoft consumers in Europe. The company said it would invest more than a quarter-billion dollars in capital and operation of the new data center over the next few years, with the potential for further expansion over time.

Chris Umiastowski

Really simple. Microsoft wanted Nokia. Nobody wants to buy BBRY hardware business.

Posted via CB10

sidhuk

LOL.
If that's your "simple" answer then my apologies to waist your time. Never again question your IQ.

birdman_38

Microsoft has been Nokia's ace in the hole the past few years. BlackBerry doesn't have anyone like that to rely on.

currentodysseys

Interesting piece as always Chris, thanks.
I have a far fetched question though: With this change of scenery, where is Sony's mobile hardware activity driven towards?

Considering Bert Nordberg's posture and ties to Sony, I would imagine that a scenario on a possible partnership between BB & SONY could be partially considered? I would like to ask if you have a take on that and if you might want to have your opinion outed; I know it is a recurrent subject since February, but with this last development on MS and Nokia, I think that a re-take on possible BB-Sony deal under the new landscape would be an interesting read!

On the other hand, "seeking strategic alternatives" announcement, most probably means that something has been on the table for some time IMHO, but even if it is like that, the timing of Nordberg's incorporation would fit in, in such scenario.

For me it just does not make sense to have a huge new OS investment out without covering these angles and I am of the opinion (guessing better said) that the current situation has been mapped and reconned prior to launch even most probably, at least as plausible plan B, thus probably a reaction to seek alternatives so early in, in a three phase plan?

If you think this angle might deserve a take and find it plausible and interesting, I would love to read your take on it!
Thanks!

cgk

Sidhuk - that is the press release that was issued this morning and is incomplete/incorrect - /See slides 19 and 23 - http://www.microsoft.com/en-us/news/Press/2013/Sep13/StrategicRationale....

This was also confirmed in the Press conference that was held this afternoon.

dshusha

Unless someone like Lenovo or another "big" player steps up and buys Blackberry .. then it will be bye bye Blackberry. BB doesnt have deep enough pockets to be able to compete with Apple, Google, Samsung and now Microsoft.

Tim Heard

Chris,
With respect to hardware companies now being out of the picture, I think there's a possible angle which hasn't been explored.
Microsoft felt the need to purchase a hardware delivery company because they know that they can't do hardware well. They need a partner to help them improve in that respect, and likely to help them have additional control over software development because they will be able to dictate standards.
The reverse is not obviously true that Blackberry must remain a hardware manufacturer.
First, while Google does own Motorola, that's not where we're really seeing Android's success. Granted, the success of the Android brand also points to a shortcoming in that, there is no universal standard for software development ... and there's also the malware issue, but that's the subject of another discussion.
A partnership with another hardware manufacturer would make sense if there were a manufacturer that could handle that piece better than Blackberry does. While it can certainly be argued that Blackberry cranks out very sound hardware devices, there has been a lot of complaining about the prices of Blackberry devices. At least in theory, if a partner company could produce comparable devices at a significantly lower cost per unit, then a partnership makes sense. Similarly, if some big Chinese company (or other company) were to believe that they were very strong on the hardware side, but liked the total package of what Blackberry offers on the software side (security, and differentiation from Android, iOS and Windows, for example) then they might very well see the value of a partnership, or simply buying Blackberry outright. The challenge of the Lenovo buying Blackberry outright scenario though is the idea of a Chinese firm owning the company that provides the software that keeps mobile communication secure for our government and many major US employers. ... To me, that seems like a deal that's unlikely to be approved.
Anyway, as I posted elsewhere, I think BB stock going up is a sign that the market is consolidating, and some other company is almost obligated to grab Blackberry in order to be a contender.

... Of course, maybe that's just wishful thinking on my part.

jstirtzinger

I have always thought the same thing...a strong hardware player that has no ecosystem of their own and has all their eggs in the Google basket would be the right "partner" with BB. Sony, HTC, etc.

dr0800

Over in the UK you can get a Z10 for £230 Sim free. At that price it is a seed device that should sell like hotcakes to all consumers.
The problem is the consumer smartphone market is cut throat with minimal margins on hardware. If you walk down any street over here you see two phone makes; I phones, who set the gold standard and Samsung Galaxies, who copied the IPhone experience at a cheaper price.
I feel BlackBerry's marketing has been too weak. Now the price has come down it's the time to push the ads.

FryBerry

How I look at this, Google will now be the only OS that doesn't control the manufacturing side. Apple folowed BB and controlled their own from the get-go. Now Microsoft controls theirs. This could be a plus for BB, only in that the market may look at controling manufacturing is the way to go. BB now needs to step up and kick out some killer looking devices to go with their killer OS.
We have seen several mock-ups here on CB that people would kill for, time for BB to listen to its most loyal of customers and follower their own advice, "get things moving"!!

gsdc

"Apple folowed BB and controlled their own from the get-go."

This is either revisionist history or you have no idea what you're talking about. Apple is older than RIM/Blackberry, and has from the beginning controlled all aspects of their products. Blackberry entered the phone market before Apple, yes. But if Blackberry never existed, Apple would have entered the phone market still controlling all aspects, because that's what they've always done. Not because they were 'following' Blackberry.

FryBerry

You kinda got me there. I was referring to phones only, I should have clarified. I also was not implying that Apple "followed" BB because BB was the first company in the world to not outsource production, I was speaking chronoligically.

ankush77

it makes Microsoft more strong player now,but heard that they may even change the brand name of nokia hardware,it may not be a good decision

wincyUt

"Mirror Mirror on the wall, tell me what do you see?" I see eh eh......I don't know what I see. :) Does anyone truly know what the future portends for BlackBerry because of Microsoft's acquisition of Nokia's mobile operations? Simply, anything is possible; maybe BlackBerry will just do fine by being the # 4th or 5th mobile player. Funny there are other much smaller mobile companies striving to gain foothold in the global mobile market like:

http://www.theverge.com/2013/3/18/4100006/why-blu-products-can-beat-samsung

203

This isn't good for anyone. I doubt the networks will relish the thought of having to deal with Microsoft more directly too.

The good news is contrary to the editorial the remaining Nokia company has retained the navigation and mapping business and will licence it to Microsoft. Nokia is also prevented from releasing a new mobile phone for 30 months. So it's not out of the question that Nokia could even partner with Blackberry in the future as it attempts to recover from the disaster that Microsoft stooge Steven Elop has reaped upon it

martinjdub

Damn...

Posted via CB10

MrJohnyBoy

Well I have 2 more years on my Z10 contract, if by the end of that they still have not turned things around then I guess I'll make a switch to a windows phone

Posted via CB10

NickNick43

Having come from Andorid (original Moto Droid to WP7 to WP7.5 with Android in between to WP8 back to Android Jelly Bean on a GS3 and now to the Z10 I can say with confidence that this is by far my favorite OS and I would go back to Android before going back to WP. However the z10 is one update away from being IMO ahead of the competition from a productivity and operation standpoint for a year or two at least.

Alex Keb

It means nothing. Ballmer made this acquisition as a last fingerprint in his abysmal performance in already disasterous run in $MSFT management. I thought Microsoft was smart in keeping hardware manufacturing out of their business since service and software is where real growth is in revenue.

Unfortunately Microsoft reversed the partnership with Nokia where it benefited by selling its software and services while letting Nokia take the brunt of dealing with low margin squeeze in hardware sales.

It's not enough that Surface tablets failed and you would think that Microsoft learned their lesson, but nope they now doubled down on a mistake that will trigger further downfall of this dinosaur company.

As for blackberry they already doing all the right moves to take lead in incompetence.

uyi2g

Is it just me or has it been really quiet on Crackberry lately, heck we don't even hear from Kevin anymore.... guess it's the great depression.

Posted via CB10

Jtaylor1986

BB has already killed their consumer business with the uncertainty surrounding the strategic deals. Even I as a hardcore user have no faith that they will be around in their current form once something is announced. Nobody is going to buy into that uncertainty, be it a consumer or developer.

VeeVee10

Just watched the coverage on this on BBC news and the analyst gave BlackBerry 6 months before they go bust. I think that's a bit of a wild prediction but I do think whatever BlackBerry decide to do it needs to be a worthy company in terms of any mergers or acquisitions.

Posted via CB10

crackfinder

The only way I see it is privatization at this point.

Posted via CB10

anon2100101

I deny to give a projection cause this market doesnt work predictable or rational... No doubt it- the OS10 has the potential to become the best smartphone/computing OS worldwide and the hardware of BlackBerry (especially the QWERTY-devices) belongs to the upper class. (Design is a question of taste)... But what happens?! Apple rules the market with an overrated phone, htc sells like hell (relative).... Obviously the success of selling doesnt depending on objective quality of a device- Nokia Lumia became a very successful phone AFTER a veeery overpowering advertising campaign! So I dare to say, that purchasing Nokia means nothing for BlackBerry- the future of BlackBerry depends on the next steps of themselve! Nokia prove it: advertising works more than other aspects. BlackBerry has to rebrand their image, has to be offensive and bold.... my two cents- if BlackBerry fails- dont have a look to MS/Nokia, ask Alicia Keys and Frank Boulben for their sabotage!

ricocan

Could someone in Crackberry comment on whether they think BBRY has even really wanted to compete or survive? For a little while now I'm of the impression that they don't, at least not in hardware, their responses are lethargic and leave me with the sense that they are, and have been in way over their heads. What are they waiting for, they seem to be more interested in protecting the cash than spending money to market and fight?

Ricocan

finkmob

It's more logical than ever considering they've done NOTHING to market the new devices

Posted from my 6230

mobilesync

The key to success in smartphone industry is tight and seamless integration. Microsoft finally made the right move. Cheers for Ballmer.

The next one will be Google-Moto, but not necessary with Android.

BlackBerry is the first to figure out the key. And it will continue with this very strength - tight and seamless integration. Those who suggest otherwise are either short term profit driven or don't have any knowledge about this industry.

Nathend

" The next one will be Google-Moto, but not necessary with Android. "

? What ?
LOL what have you been smoking. do you realize how global Android is ? or better yet how much $$ Money Google is making from that ?
I think you may need to read up on things.

mobilesync

Some say Chrome OS. I am not sure; maybe a variant of Chrome; maybe a completely new mobile first OS. Google definitely has something more powerful than Chrome in the works.

Android is really showing age it is about 12 year old. It was conceived at the same time BB Java started, that was the time when we first looked at it (Danger) for the company anyone on this forum should know. We decided at the time it has no value for xxx, which is true, but could have nail it at that time.

Then, in 2008 we evaluated it (Called Android and with Google already) again with a thumb up, of cause for another company (not Google). But now Android is really showing age. Samsung S4 will perform (Please put S4 and Z10 side by side) much better (given the hardware spec) if it runs other OS. Samsung would loose money as others do if it was't a component maker. Google has the ability to make changes and enhance it (I mean the core and main UI framework, not bells and whistles). But some fundamental design flaws and the very fact that it has a huge user base prevent Google from doing that. Therefore, a brand new OS from Google will come and probably thrive. That doesn't mean Google will stop Android right away.

For BlackBerry the up coming new OS from Google will be the major competition - not Android. If Google continues to hang on Android alone, BB would have a much better chance to rule again.

malongzy

I partly agree with this article, however the fact is, this deal changes everything. Apple is who they are today because the solely control IOS and are able to build a solid hardware to match it. RIM arrogance, over dependent on BBM, lack of innovation, lack of creativity and so on are factors that led to their demise. Regardless of what analysts say, consumer markets would always top corporate, and for any organisation to survive in it takes creativity and innovation. With all that said, the consumer market is big enough for all to thrive and I hope this would be a wake up call for RIM. They need to start poaching developers and brings more solid apps to Blackberry OS10.

oldron

Why is this a surprise to anyone? CEO of Nokia was Stephen Elop (Yes a canuck). He went from Microsoft as head of their Business Division to CEO of Nokia, and will now become Microsoft's Vice President of Microsoft's Devices & Services business unit. The apple never falls far from the tree and neither does the money.

Nathend

He also might become the Next CEO.

DonMarcello

Chris, what are your thoughts on Amazon as a possible partner/buyer of BlackBerry? They have generous cash reserves, an extensive ecosystem that offers a wide range of products and services and affilations with many diverse companies giving them a global market presence.

gregerator

I've thought about this too and the question comes, how does Amazon monetize BB? They monetize the Kindle tab by making it nothing more than a portal to all things Amazon sells. Where does the money come from in a mobile phone system for them?

Jonathank

Nokia has always been a hidden gem. Only now is the US seeing Nokias potential

jd062

Google started with software, outsourcing their hardware, then got into the hardware business with the Nexus (with help). Microsoft is doing their version of the same. BlackBerry should license the software and keep building their own phones. Who's not to say that, we could have one leader followed by 3 companies vying equally for second and third place, enough that software writers wouldn't have to write for all four platforms. Just don't charge double for BlackBerry phones compared to licensed phones.

Killjoyhere

Regarding this story, I still think it would be in BlackBerrys interest to license out its operating system. Who cares if you have to compete with your own product because you will always end up winning.

Posted via CB10

beavertail2

Chris,
There are more than one way to skin a cat.
Just wait and see.
BlackBerry has more than just a handset business.
It has cross platform BBM, QNX Infotainment, Secured Network Services, Enterprise Security Business and Patents.

People tends to forget Lumia has at least one year head start. Kantar # lumps budget phone and high end phone together to compare with BlackBerry high end phones. Hardly a fair comparison.

Cross platform BBM will grow consumer mind share. In the future, using the same BBM PIN, these customers can move over to BlackBerry with ease and familiarity.

To expect a blow out in the first six months of launch is unrealistic. Prem said in day one, the turn around will take years.

BlackBerry has the right products, 10.2 OS, cross platform BBM, BlackBerry Connection Service etc. "Build them and they will come".

Chris Umiastowski

Oh, don't get me wrong.  I think the cross-platform BBM opportunity is fascinating.  They could own the absolute best in class mobile communication app that works across iOS, BBRY and Android.  And ironically, if they do this and create a huge network, then MSFT would be the odd man out.

This is part of what I mean in my last sentence.

HabsBB4Life

Love the smell of monopolies, soon innovation and consumer concerns will be a thing of the past as the lack of competition pushes the corporations tunnel vision further down the money hole.

I'm not saying BlackBerry has been perfect through BB10's life cycle to date but I'd rather have the choice to pick MY phone and not then be stuck with less options.

Posted via CB10

quizm

Good article. But I'm not so sure that it changes much for BlackBerry. Its road was and remains difficult being so small in relation to its competition. Very difficult. But I am not persuaded that Microsoft can do hardware very well either. I think one of the new big three will now buy blackberry. Who will it be? For both enterprise and qnx automotive. My guess is Google/motorola. But I could easily see reasons why each if the others would too. Either way BlackBerry will end. Pity because I have really come to enjoy bb10.

Posted via CB10

buckwylder

BlackBerry leaving the hardware business would be ridiculous. They would be stupid to do that.

Posted via CB10

Kiddo2050

It seems clear to me that Lenovo should purchase Blackberry, especially with Samsung working on Tizen or whatever they call their OS. Only issues is that the US government might block it. True North Strong and Free. 8/

JamesPtheNerd

Very compelling points:
1. Microsoft is doing sooooo well with controlling hardware (Surface RT and Surface Pro). Maybe Nokia has some cool hardware up their sleeve in this area.
2. BBRY could do well to concentrate 100% on enterprise cloud services. Perhaps make their Balance environment even stronger on iOS and Android. Provide a hosted Balance Service or through Hosted Exchange Partners. And BB10 can live on through Android-powered hardware.

Man,i need a forum post for these ideas!

Posted via CB10. Follow Nerds On Site, your technology partners world wide, on BBM Channels: C001227C4

mikekeyser

Yes, very compelling, up to the Android hardware... that cannot happen.

Cloud BES 10 MDM for all makers and users, partner with VW for the cash, done.

bbfanboi

What it means for me is: Microsoft and Google have both come full circle! A couple of years ago, they were both blasting BlackBerry for sticking with the hardware business, they have now realized that there is great benefit to owning both sides of the business: software AND hardware. A while back, Google turned around and bought Motorola's handset business, and now Microsoft has done the same with Nokia. How talk has changed!

buckwylder

It means Microsoft just spent a ton of money on something BlackBerry has always had, a hardware business. BlackBerry would be foolish to abandon their so called "hardware business". I say "so called" because it just plain "business" for BlackBerry. They've always been a hardware manufacturer and that should never change.

Posted via CB10

bbfanboi

Sorry, Chris. It is greatly undervalued! Their hardware is of the highest quality out there. It's on par with Apple. I would think that it is worth more than $1.5B -- technology & personnel.

Chris Umiastowski

Only if: A) They can make money selling hardware B) Someone else wants to own the business

Nathend

Exacly.
A. They are not making money selling hardware , because it is not selling.
B None of the BIG Players seem interested in purchasing BB. MS is now gone as one of the rumors.

dr0800

My take on the Nokia sale is that Microsoft HAD to buy as Nokia was about to bail on Windows phone.

buckwylder

BlackBerry should and will probably NEVER STOP MAKING HARDWARE. Give it a rest already with adding fuel to the ridiculous "sell or abandon the hardware business" BS, it's annoying.

Posted via CB10

birdman_38

You need to remove emotion out of the equation, buck.

VLinSD

Great write up.

Z10 | 10.2.0.1371 | VZW

StoicEngineer

I cannot see how this changes the fundamental path forward.

Microsoft; the owner of the Windows phone OS (software), purchased the largest Windows phone (hardware) supplier. How has that changed the market?

Will the purchase lead to phones that have not been contemplated? Are there efficiencies to be gained? Has it made the market larger? Was there an advertising avenue that either Nokia or Microsoft missed? Did Nokia phones not fit into a secret Microsoft enterprise solution that MS ownership will enhance?

This only affects those who thought a Microsoft-BlackBerry alliance was possible. It is not now.

This is a distraction. BlackBerry still has the same issues as yesterday, as last week. The path forward remains the same.

Posted via CB10

dejanh

This is actually a very good point. It does feel like more of a distraction than any sort of fundamental shift. Nevertheless, two things about BlackBerry still baffle me...

1. Why are they sitting on almost $4 billion in cash and not using it to build up the brand and BlackBerry 10 platform?
2. Why are they still not opting for direct-to-consumer sales? If they started selling unlocked phones directly to consumers through their website and through other resellers they would surely increase the BlackBerry 10 uptake. The carrier subsidized model is too restrictive.

I really don't get it...

Chris Umiastowski

I think the major change is that Microsoft has de-risked losing its biggest partner and also improved growth potential by taking full control. Stronger competition. Thats it, in a nutshell.

Posted via CB10

StoicEngineer

Chris, I see your points. Microsoft has paid a large price to eliminate the real risk of loss of their manufacturing partner.

However, there is a rocky road in such a takeover. At the least, the potential for a clash of corporate cultures exists. This speaks to the "full" control aspects. Then there is the question of "vision". How likely is it that the Nokia phone company "vision" is even close to what Microsoft has in mind?

I've been through these sorts of corporate "marriages". The honeymoon is always exciting. The living together afterwards takes its toll. I think that the people at Nokia are the winners here. Microsoft is going to have to do the bigger share of the work to make the "marriage" thrive. What's their record been recently?

BeautyEh

Yeah I have to agree with this sentiment. How does this really, in the end, affect Blackberry negatively ? Microsoft has not shown convincingly it can compete in Apple and Samsung's world yet...not even to mention Blackberry's comparative advantage worldwide and in the developing world. I think we tend to think only in terms of North America...it's a big cell-using world out there.

20degrees

What little respect I had left for nokia, I've now lost it.

Q10

lilchurchboy

Good article. I like windows but I hate the tile block, I love nokia products. I think Microsoft and blackberry should team up. BB10 os with Nokia hardware and Microsoft cash. They cant lose!

kja123

Chris already mentioned it in the article, it was my first thought when I heard that MS buys Nokia: now is the chance for the Nokia maps branch to go cross platform. Nokia offline maps on BB10 would be really great!

Posted via CB10

ayumu

It all seems so obvious.

Dantala

BlackBerry needs to close the app gap!! Most importantly bring some innovation to the platform, something new, a reason to want to buy a blackberry 10 smartphone!!

Posted via CB10

wnyjackson

Two thoughts;
First- would it be possible to have a phone feature 2 separate OS's in divided secure silos? Just like BB10 features a secure work profile separate from the regular less secure profile, could a company like Samsung bake BB10 into a separate/secure profile on an S4 or S5 phone? Granted I don't know what appeal this would have for a consumer at all this is just the BBfan in me to envision ways of keeping BB and BB10 alive. I'm sure corporations/governments would like to have the option of an ultra secure silo-ed BB10 OS available to handle sensitive information while keeping their workers happy by giving them access to Android market. It's like having the best of both worlds.

Second-IMHO Amazon makes the most sense as a potential buyer/partner. They have a nascent ecosystem in Prime that they continue to pour money into and with the security of BB10 and the fact that Amazon is basically a retailer people could feel secure in using their phone to purchase and manage all their media and with QNX and M2M there exits the possibility of a seamless integration of all your personal Amazon Prime media being available to you as you move from machine to machine. The phone would be the key that allows you to instantly have all your music available on any car you drive, all your movies on any TV or set top box all through QNX and BB10. Plus Amazon is rumored to be looking into a gaming system to take on Xbox and PS4. There are a lot of possibilities here.

mobilesync

Your first thought is unlikely to happen.

Your second is very good. BlackBerry has everything but reasonable ownership and competent leadership, which an American company like Amazon can provide.

wnyjackson

Yes I agree, the first thought was a reach lol!

Thanks for the feedback

sdpickett71

It seems pretty well established that people, in addition to apps, are looking for an ecosystem of devices. Wouldn't it make sense for BlackBerry to license the OS to a Sony-type company to have access to a stable of devices? It maybe a hard sell, but all the companies using Android are taking a beating from Samsung. Maybe they would fare better standing out. A 'Sony' would also have more resources for marketing and it may enable opportunities to integrate more into gaming. BlackBerry clearly hasn't learned how to market to the Consumer yet - their ads are dry and forgettable. Maybe it's time to drop the exclusivity and take a multi -pronged approach. (Lots of 'maybes ' in this I know - just thinking out loud)

Posted via CB10

undone

I wonder if Nokia sold phones because it was Nokia or because it had Windows OS. If I am not mistake, they didnt buy the name and branding can be everything.

dejanh

I think that Microsoft is about to find out the hard truth...people were buying Nokia and it was Windows that was hurting the potential.

nt300

Mark my words undone, NOKIA sold phones because its a NOKIA not because its WP8.

smoothrunnings

This is means the death of BlackBerry!!! Muahahaha!

BoldBigWorm

Blackberry is: "heading up the river in a boat with no paddle"-Cypress Hill

Posted via CB Q-10

Flip4Bytes

The one biggest things that BlackBerry has going for themselves at the moment in regards to all of this is BBM. BlackBerry Messenger is not coming to Windows Phone (anytime soon) for obvious reasons (at-least I think, maybe?). As much as I dislike Android and iPhone, it's better to have people switch from Windows Phone (due to no BBM) to get BlackBerry back to it's 3rd spot position. If/when everyone else in the world is using BBM but Windows Phone, then that quickly converts it from "Buy a BlackBerry to get BBM" which is what BB relied on for a while, to instead "Don't buy a Windows Phone if you want to BBM". I am very curious to see how this all plays out. If BBM catches on like we all hope, then what's that mean to Windows Phone users? I think it would be in BlackBerry's interest to NOT develop BBM for Windows Phone unless BB takes back 3rd place and is enough ahead.

Zezel

Gear article Umi. No runs doesn't suck for BlackBerry we are in a competitive world. The quick and the dead. That is all there is in mobile/software/web.

What this accelerates is the need for BlackBerry to partner ( Samsung or Amazon) and get repositioned.

I thought about it today. BlackBerry is a little Canadian company swimming with some rather big sharks who woke up 6 years ago to mobile. They had a great run and now it is time to align with a big boy and move forward.

Posted via CB10

JMDBERRY

It means Microsoft won't be buying Blackberry!

JMDZ10

JMDBERRY

Lord I hope BlackBerry doesn’t team with Samsung! Pls don't let this happen...

JMDZ10

ads72

You're an idiot. Of course it confirms bb is severely undervalued. You guys in the media are pathetic liars. Do you know how much capital it costs to even start up a handset business? It costs A LOT of $$ to build a handset business from scratch - from design to supply chain to manufacturing to approval at hundreds of carriers and then gov't approval... Don't let anyone convince you that the handset business at BBRY is worthless, it is far from that. IF a company were to buy the handset business and then put big marketing dollars behind it, it could compete and slowly grow market share. patience will be rewarded on BBRY shares. Glad to see some oil being put on the M&A machine with the Nokia deal...this should help shake something loose.
Oh btw Chris, nokia's lumina sold 2 million units the first qtr it was released. BB10 sold 2.7 mil.
Kinda shoots down all the bs you wrote. Now maybe the conspiracy people are right and insiders at bb are intentionally trying to drive down the stock to acquire it for ultra cheap. If that is the case, then someone should investigate this as it's illegal as hell to do.

FlashFlare11

I think this was expected and I saw this move coming when I heard that Microsoft was making their own tablet (Surface). I think Microsoft is moving from a software and services company to a fully integrated solutions company, similar to Apple and BlackBerry. I had read somewhere that Microsoft was growing weary of hardware OEMs being the reason for a mass exodus from Windows. I think Surface was the first move for Microsoft in moving away from depending on OEMs. Now, with this acquisition, Microsoft can now totally control their smartphone division.

Another thing that I noticed instantly was that Microsoft is going to continue to license Windows Phone to OEMs. I see this strategy winding down for a couple reasons. I think Microsoft's intention was, originally, to flood the market with Windows Phones to get customers engrossed in the WP ecosystem through the use of numerous manufacturers. Now, I think Microsoft will wind down licensing their software to OEMs and just solely produce the phones itself. The other thing is that OEMs will now begin to move away from Windows Phone because Microsoft now has a dedicated manufacturer. Add to this Google's acquisition of Motorola and this leaves hardware manufacturers like Samsung, HTC, LG, Sony, etc. almost totally at Google's mercy.

Now, as for BlackBerry, I think Chris is absolutely correct. Microsoft's desire to control Windows Phone from end-to-end should solidify the effectiveness of this model as opposed to the open Android model. I do not think BlackBerry licensing BlackBerry 10 is the correct solution. While this Microsoft/Nokia deal doesn't make the marketplace any easier for BlackBerry, it does illustrate that BlackBerry has followed the correct model in the past and that straying from this in the future could prove more costly.

ofutur

Nothing changes, BlackBerry is still working on getting BB10 to run on Samsung hardware and hopefully the joint venture will be announced before the end of the year.
Still looking forward to my Samsung Galaxy Pro running BB10 and Android. Awesome OS combo, with better hardware.

Flip4Bytes

are you kidding me?? Samsung hardware is complete crap.. How can you think that their plastic crap, ugly phones are good hardware..?

ofutur

BlackBerry can design the outside and put the nice internals in a premium plastic case (q10) for customers like you ;)

Sent from my Z30/3

Rickster1

Erickson, IBM, just 2 examples of companies that exited hardware to focus on software. BlackBerry needs to find a software partner and get out of the handset business. Focus on software, be it BBM, QNX, and delivery of services, for money!!! Hardware business is becoming a loss leader business, software is where it is at and always will be. License BB10 to Sony and Samsung and drive on as an independent company. Lots of opportunity in software for them. Especially in security and licensing. Hardware is just not worth it.

Posted via CB10

nt300

Windows Phone 8 had one good Quarter and was above BlackBerry Slightly. BlackBerry continues to remain as the #3 player in North America and in Europe, though WP8 is getting closer to BlackBerry in Europe; they are none existent in Canada and the USA.
So no WP8 is not #3, they are #4. Let’s clarify the facts once again.

Antikythera Mechanism

This is simple strategic planning on microsofts end. Not to mention a select few hoarding up some Nokia stock, just before the big announcement. Will this prove to be a good deal? Only time will tell.

Posted via CB10

d_chosen1

And the writing was on the wall. No BBM support for windows phone

Posted via CB10

spalom

The fools on duty, remember that this is just business.

Jim Banks2

I think the smart phones of today blur the line between business and pleasure and to succeed they will need to chase both markets at the same time. I don't think there is any question the the bb10 operating system is in the same league as android and apple and we all know the problem is with apps.

To succeed they need to look at the long view and just hold on long enough to get there. I also think they need to chase kids and I mean young kids. Hopefully they will grow into BlackBerry's as they get older. I think in a way that is actually how they lost the market by ignoring them in the first place.

Posted via CB10

Smylie94

I was just thinking that Microsoft knew Nokia would eventually go under therefore sinking the windows phone platform. Therefore Microsoft knew that their only option was to buy Nokia and in turn gain hardware control. Maybe now Nokia can actually succeed?

Posted via CB10

Nine54

Well, the move definitely means that the words "beleaguered" and "Nokia" no longer will appear together in the same sentence. MS can invest more in WP devices--even at a loss--without its overall financial health hanging in the balance.

Does this help or hurt BlackBerry? On one hand, having one less "beleaguered" vendor might help lift some of the doom-and-gloom sentiment around the alternative platforms. On the other hand, it could just mean more scrutiny for BlackBerry and HTC...

BBRYed

HP are you ready to try again? We are ready to date you.

Poetry in Motion

BeautyEh

Echoing @ stoicengineer above - this is ultimately a distraction. Microsoft is not Apple or Google.
Kudos for the realism about Blackberry's overall situation. But every realistic scenario can be optimistic also. As we approach the holiday season, one imagines BBry going on a marketing blitz for:
Z30
BBM
The BB10 line

This is not to mention Q10 coming to Sprint, which I really believe they will get something out of. Sprint has an excellent reputation with business/enterprise customers (arguably the best), AND they seem pretty committed to pushing the Q. This might be the last best chance to salvage the whole ship, hardware and all...but I do think there is some momentum going into these crucial months.

timmy t

If it puts an end to speculation about BBRY selling their hardware division, good.
If it increases the speculation that BBRY will fold their hardware division, bad.

BBRY have to be seen as in this for the long term to regain customer and app developer confidence.

Flatman

Agree completely with your summary .
What now?

A Z10 Post on CB10

hispanola

See my post (http://forums.crackberry.com/armchair-ceo-f410/bb-niche-device-845497/) as to what BB should do. They need to be a niche player, but not in the way most think.

andy957

My question: let's say that the worst happens, i.e. BB folds and everything just goes away (I know, I know, I'm just saying). What then happens to the millions of BB devices in the world? I'm wondering about carrier infrastructure and whether there are any technical (or other) reasons that the carriers will be able to not 'support' BB devices anymore.

P.S. I know of a *LARGE* company that likes to acquire other companies. I've always thought this would be a good one for them.

--rez--

I think MicroNok will eat sales from iPhone and Blandroid

Posted via CB10

--rez--

... and BlackBerry will gain from disaffected users from 3 OS ES now instead of two.

Posted via CB10

dono007

What I'm more surprised is the price. It's only a little more than half what Google paid for Motorola. I'm not analyst but here around Asia, Nokia is everywhere, whereas I haven't seen Motorola in ages (since Razor?). I know it still strong in North America.

JakeTheCat

You are right that Nokia is huge compared to where Motorola was when it was bought out. But a lot of the value comes from patents. Google got Motorola's patents. Nokia's patents stay with Nokia.

Bacon Munchers

I feel another MS propaganda bubble forming here.

I guess time will tell if it raises.... or falls.

As for BlackBerry, let's see what happens after they have the full line launched, and users at the corporate levels are forced to use the bb10 devices for a while.
My guess is that after they get over the "where's my trackpad?" shock, they will get the hang of bb10, and realize that it is a better OS.

PS - Lenovo isn't buying BlackBerry, and neither is Microsoft.

Jimcmf

So much garbage writing out there. When will it stop?
Verbal diarrhea is everywhere.

Pages