After the absolutely brutal announcements this Friday and debacle of a cross platform BBM launch this weekend we now have BlackBerry pulling another rabbit out of the hat. A consortium lead by Fairfax Financial has put in a letter of intent to acquire all of BlackBerry for $4.7 billion or about $9 per share of the battered BlackBerry stock. The deal still has another 6 weeks to get finalized during due diligence with other suitors possibly making a bid but this seems the most likely route. This huge piece of news has many wondering what direction Fairfax Financial and Prem Watsa have in mind for BlackBerry in the future. The only idea we currently have is a cryptic message in the press release by Fairfax CEO Prem Watsa:
“We believe this transaction will open an exciting new private chapter for BlackBerry, its customers, carriers and employees. We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company with a focus on delivering superior and secure enterprise solutions to BlackBerry customers around the world.”
That seems to be a strong hint that BlackBerry’s consumer focused days are coming to an end with a heavy focus on enterprise solutions. This means BES 10 and its cross platform MDM along with the enterprise BlackBerry 10 users. What will be very interesting is what Fairfax does with the other parts of BlackBerry. Most of BlackBerry’s customers currently are consumers according to the last count I saw. On top of that BlackBerry is in the middle of some very consumer focused initiatives including cross platform BBM and new BlackBerry 10 devices like the consumer media friendly Z30. Will Fairfax possibly spin off the hardware and BBM platform pieces into separate entities?
Another interesting angle is what BlackBerry will do with their QNX acquisition and their heavy focus into car entertainment systems. QNX is the basis for BlackBerry 10 and that tight integration is the only reason we have BlackBerry 10 where it is today. If Fairfax spins off that piece then BlackBerry 10 as a platform may suffer even if they continue to license QNX. This really has me wondering what Prem Watsa has as a long term strategy for BlackBerry. Now that the company has chopped yet another 40% off their headcount they are contracting into what could be a laser focused company. The problem is that BlackBerry learned in the past that the consumer market is slowly taking over the enterprise market in a grassroots effort.
I think that Fairfax should double down on BlackBerry 10 and the combination of corporate and consumer market that appreciated the rock solid communication platform it offered. This means an end to the “me too” additions of features to BlackBerry 10 and instead appealing to the market that made BlackBerry take off. Right now the holes in the BlackBerry 10 platform are something that any hardcore BlackBerry user could point out to you within a few minutes. Going private may finally give BlackBerry that ability to refocus on its core values and actually deliver the product they should have delivered three years ago.
Let me know what you think Fairfax has in mind for BlackBerry if this deal goes through. It should be interesting to see if BlackBerry gets other offers.
PS: The conspiracy theorists are having a field day with the fact that BlackBerry announced their terrible preliminary results on Triple Witching Friday and then the fiasco of this weekend leading into a bid by insider Prem Watsa today.