Light Reading

Time to Flip BlackBerry's Handset Kill Switch

Sarah Reedy
11/22/2013
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For BlackBerry, it's less a question of when the cash will dry up and more a question of when it will admit it has no future as a handset maker.

Sure, everyone else has been saying this for the Canadian company, but it has yet to admit (maybe to itself, too?) that its hardware days are numbered. In fact, its new interim CEO, John Chen, reiterated to Reuters this month that BlackBerry has no plans to shut down its handset business. He said he could turn the company around in about six quarters. (See: BlackBerry Gets $1B to Drop Sale Search, CEO Resigns and BlackBerry Inks Deal to Go Private.)

But first BlackBerry has to agree on how the turnaround should look. According to one potential bidder, the pension fund Alberta Investment Management, all the country's leading pension funds were looking at proposals to save BlackBerry early this year, but they never saw one strong enough to justify an investment. Leo de Bever, the fund's CEO, told reporters this week that BlackBerry lacked a real plan.

I believe step one of that plan should be admitting and accepting that its days as a hardware maker are numbered. BlackBerry's future -- if there is to be one -- is in enterprise software.

My guess is that this is being tossed around behind closed doors right now. Just today, the company confirmed that it had purchased the French company Scroon, which manages social media content for corporate customers. And Chen, who has a history of turning around companies like Sybase, is experienced in enterprise software. Why would BlackBerry bring in a CEO with no hardware experience (even if only for the interim) if it thought it still had a chance at building handsets?

The writing is in on the wall. So far we've seen carriers like T-Mobile US Inc. stop selling BlackBerry devices in their stores, and its manufacturing partner Jabil is saying it wants out. The new devices might be impressive, but it doesn't matter. Customers aren't buying the devices, and the company is losing support in the supply chain.

All that is left for BlackBerry to admit it's done with handsets, so it can give enterprise software a real shot.

Now, there's no guarantee that a focus on software would save BlackBerry. From my point of view, that ship may have already sailed as enterprises have turned to the iPhone and Android during its struggles. But, frankly, it's BlackBerry's only hope if it wants to continue as a company, rather than, say, selling off its IP and fading away.

There are far worse things stealing the spotlight in Canada right now, but BlackBerry's fresh $1 billion of funding won't be enough to right the ship. It needs a plan, and, without an acquirer in sight, it needs to save itself.

— Sarah Reedy, Senior Editor, Light Reading

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SarahReedy
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SarahReedy,
User Rank: Blogger
11/25/2013 | 5:20:18 PM
Re: Qualcomm's bid
I have to agree about the Android v iPhone, form v function. Android users seem to care more about the size and customizability. You buy an iPhone to look the same, not different!

Other form factors could be where it's at for HTC, but BlackBerry owned QNX too, and I had the same thought. They dropped the ball there. HTC will have to make a serious push to be seen as credible in the connected home.
MordyK
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MordyK,
User Rank: Light Sabre
11/25/2013 | 3:38:09 PM
Re: Qualcomm's bid
I just gave in and parted with with my Blackberry and bought the HTC one because I gave up on the keyboard. I too love the design but I wonder if on Android design itself is enough.

Since its early days Android's have come out as utilitarian ugly duckling's next to their iPhone peer with the exception IMO of the original Nexus, and I wonder if the base that's now attracted to Android has any interest in the aesthics.

My belief and what i've been thinking for awhile, is all Android's are pretty much the same with slightly different skins and sizes, so if you're gonna go head to head with the super wealthy Samsung you lose. If however you differentiate by serving up a unique and needed capability well ahead of others you will gain respect and loyalty (and revenues :)).

Beats speaker system was an interesting play which gave it an edge up, but there are plenty of technologies and capabilities that are important to a smaller but devoted segment which can gain you loyalty and sales. Examples are the physical keyboard, liquid keyboard, BioMetrics, advanced fitness capabilities, Braille, etc.

Remember all those Crackaddicts with the arthritic fingers need a new outlet for their well honed finger twitches :)
SarahReedy
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SarahReedy,
User Rank: Blogger
11/25/2013 | 10:12:10 AM
Re: Qualcomm's bid
I hope they do. I really liked their hardware design and thought they had a chance to give Samsung a run for its money, before they started going downhill and making bad choices (ie Beats...).
SarahReedy
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SarahReedy,
User Rank: Blogger
11/25/2013 | 10:00:30 AM
Re: Qualcomm's bid
Well, it heard you on the management changes, announcing its COO and CMO are out today, and its CFO is being replaced. On the rest...they certainly have dug themselves into a big hole to climb out of.
SarahReedy
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SarahReedy,
User Rank: Blogger
11/25/2013 | 9:58:39 AM
Re: Qualcomm's bid
If it's able to sell just parts of its patent portfolio, that could be a good option. Get rid of the hardware business and associated patents and home in on enterprise software. HTC is struggling too, so could be a win-win. I wonder how many of its patents are strictly hardware related versus tied closely with the software too.
MordyK
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MordyK,
User Rank: Light Sabre
11/24/2013 | 11:17:43 AM
Re: Qualcomm's bid
With Google/Motorola reducing the margins on smartphones, I doubt HTC can make its comeback in the sector. However there's plenty of opportunity for them to make their comeback in the connected devices/digital home sphere, where beautiful design is a priority.

The question is do they have a vision beyond the smartphone thats more than mere hope?
Kruz
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Kruz,
User Rank: Light Sabre
11/24/2013 | 6:22:01 AM
Re: Qualcomm's bid
HTC has yet to figure out how to get itself into green again with revenues plunging into red quater over quarter. ..
Kruz
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Kruz,
User Rank: Light Sabre
11/24/2013 | 6:15:42 AM
Re: Qualcomm's bid
BlackBerry has lost the chance to do any significant change even though it had 2 years to come up with a structured recovery plan.

It failed at hw with playbook and physical keyboard phones, at software, keeping bbm a closed ecosystem for years and trying to reinvent the wheel with bb 10. It is still experiencing bad management.  With no real ecosystem, the company has not much to offer, other than its patents, possibly bbm, and still... Failure to do so now will only guarantee a sell at a much lower price. It's patents can be much interesting for the likes of msft, apple, even android if it decides to sell.

It would have been a much similar path for nokia had it stick to symbian. But instead , a harsh decision was taken. One that admits the company no longer rules and sets a fresh plan. A plan that will always be a source of long discussions but just today, wp took over iOS in all Latin America. 
DOShea
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DOShea,
User Rank: Blogger
11/23/2013 | 11:14:08 AM
Sybase
In recent weeks, it has seemed like BlackBerry is getting a lot of mileage out of his experience with Sybase, but Sybase was actually able to take advantage of some of the things that hurt BlackBerry, like diversification of smartphones in the enterprise.
MordyK
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MordyK,
User Rank: Light Sabre
11/23/2013 | 12:19:22 AM
Re: Qualcomm's bid
Hence my usage of the words "high quality". The dell Venue Pro which although ultimately faulty was highly regarded although the Android version lost its keyboard which ticked off a loyal base of users.

I guess my point is that I agree that there is unlikely to be a need for a wide array of physical Keyboard devices, but a one or 2 high quality and top spec devices would address an important segment of the market. Personally i'd love to see an HTC One incarnation of the Dell Venue Pro.
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