Research In Motion (RIM), officially called Blackberry since February, is in a real state of emergency. After the announcement on September 20th that the group is laying off 4,500 workers and wants to refocus on the corporate market, Blackberry is ready to examine offers from bidders in the hope of a selling by November.
RIM was experiencing a fast decline since 2011, at the end of the last quarter it represented only 2.6% of the telecommunication market.
The company, which proclaims itself as “the global leader in wireless innovation”, saw its revenues decreasing year after year. At the end of the third quarter of 2011, the group’s profits were 50% inferior compared to 2010 and the share price dropped by 60% between February and October. The firm even tried to get back on its feet by launching the Blackberry Playbook in April, but it was a flop. At the maximum they expected to sell 3 million units which was ridiculous compared to the 46 million units of iPads sold that year.
In 2012, the situation got worse when the co-creators, Jim Basillie and Mike Lazaridis, resigned from their CEO functions. Moreover they had to lay off 5,000 workers owing to a loss of $518 million.
However, BlackBerry didn’t admit defeat easily. In January 2013, the Blackberry 10 operating system was launched, with two smartphones, the Z10 and the Q10. But this attempt was another failure. The group recorded a $965 million loss, due to its “unsold phones inventory” declared the new CEO Thorsten Heins. In front of this breathtaking fall, the firm decided to consider offers for an eventual sell off. September 20th, the CEO announced Blackberry will “refocus on the enterprise market”. However, it might be complicated as a lot of companies let employees use their own smartphones now and the market of corporate software to protect mobile devices is booming. Companies like Mobilerlron or Airwatch has already found how to adapt their software to every kind of devices.
The company, which proclaims itself as “the global leader in wireless innovation”, saw its revenues decreasing year after year. At the end of the third quarter of 2011, the group’s profits were 50% inferior compared to 2010 and the share price dropped by 60% between February and October. The firm even tried to get back on its feet by launching the Blackberry Playbook in April, but it was a flop. At the maximum they expected to sell 3 million units which was ridiculous compared to the 46 million units of iPads sold that year.
In 2012, the situation got worse when the co-creators, Jim Basillie and Mike Lazaridis, resigned from their CEO functions. Moreover they had to lay off 5,000 workers owing to a loss of $518 million.
However, BlackBerry didn’t admit defeat easily. In January 2013, the Blackberry 10 operating system was launched, with two smartphones, the Z10 and the Q10. But this attempt was another failure. The group recorded a $965 million loss, due to its “unsold phones inventory” declared the new CEO Thorsten Heins. In front of this breathtaking fall, the firm decided to consider offers for an eventual sell off. September 20th, the CEO announced Blackberry will “refocus on the enterprise market”. However, it might be complicated as a lot of companies let employees use their own smartphones now and the market of corporate software to protect mobile devices is booming. Companies like Mobilerlron or Airwatch has already found how to adapt their software to every kind of devices.
September 23rd was a new turning point. Fairfax Financial Holdings, a group of investors that owns 10% of Blackberry’s shares, made an offer of $4.7billion ($9/share), in 2008 it was priced at $80 billion. Nevertheless, some experts already analyzed this first bid and are confident on the fact that better offers will be made soon. Besides, companies like IBM, Cisco and Microsoft are said to be potential bidders.
In October, Mike Lazardis and Douglas Fredin, who own 8% of Blackberry, addressed documents about a possible joint offer to the stock market authorities. Additionally, Lenovo appeared as a potential bidder on the 25th. Even the ex-CEO of Apple (1983 to 1993), John Sculley, showed interest in the repurchase of Blackberry with some Canadian collaborators.
Such as Nokia repurchased by Microsoft or Motorola Mobility repurchased by Google, Blackberry will be another company repurchased in order to be saved. It is a widespread phenomenon but the real challenge will consist in finding ways to revive Blackberry’s fame and fortune facing the competition of the iPhone and Android smartphones.
To be continued…
To be continued…
Samantha F.
I think it's truely sad that we reach this situation. BlackBerry was a very innovative concept in the 2000s, it was the professional use tool of every executive, very useful in their work (email, documents, agenda...). But in my opinion, the arrival of Apple on the New Information and Telecommunications Technologies' market has changed all that. BlackBerry has become "old-fashioned" in front of Iphones... And today, everyone wants an Iphone... I don't think BlackBerry could outperform such a competitor in the future.
ReplyDeleteI totally agree with you on that point, it will probably hard for the firm to get back on their feet. And even if the idea is to focus on the corporate market, it is too late now. Apple and Androids are everywhere, even on that market. Now we just have to wait and see!
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