Blackberry forms committee to explore possible sale

Blackberry logo Blackberry says that "now is the right time to explore strategic alternatives"

Related Stories

Smartphone maker Blackberry is exploring options for its business, which could see the company sold off.

Timothy Dattels, a Blackberry board member, will head a new committee that will consider different business models, including partnerships.

It wants to increase sales of its Blackberry 10 model, seen as crucial to the future of the company.

"We believe that now is the right time to explore strategic alternatives," said Mr Dattels.

Analysis

Blackberry's problem isn't that its new smartphones are no good, but rather that it took so long to get them to market.

When the firm announced it was buying QNX Software Systems back in April 2010, it made clear that the purchase was designed to help it update its operating system.

By that point, Apple's iOS and Google's Android had already started to eat into its market share, but the Canadians still accounted for about one in five smartphones shipped.

However, repeated delays meant it wasn't able to start selling BB10 handsets until the end of January this year. Although reviews praised the OS for its unified messaging hub and virtual keyboard, neither were seen as "killer features", and perhaps more crucially, its app marketplace is less well-stocked.

The result is that Blackberry is able to offer devices that make appealing upgrades to its loyal followers, but consumers and firms who have already switched platforms and other purchasers might see little reason to pick the 'berry.

"During the past year, management and the board have been focused on launching the Blackberry 10 platform and BES 10, establishing a strong financial position and evaluating the best approach to delivering long-term value for customers and shareholders."

Prem Watsa, chairman of Blackberry's largest shareholder, Fairfax Financial, resigned from the board as the formation of the committee was announced. Mr Watsa said he wanted to avoid any potential conflict of interest.

"I continue to be a strong supporter of the company, the board and management as they move forward through this process, and Fairfax Financial has no current intention of selling its shares," he said.

BlackBerry Ltd

Last Updated at 19 Dec 2014, 16:00 ET *Chart shows local time BlackBerry Ltd intraday chart
price change %
9.99 -
-0.08
-
-0.79

The company has struggled in recent years to regain market share lost to Apple and users of Google's Android operating system.

'What's on offer'

"It's quite surprising to see a statement like this made publically," said Francisco Jeronimo from the technology research firm IDC.

"Everyone knows that they've been struggling and looking at their options. It's clear that they haven't been able to find anyone who wants to buy or form a partnership.

"Blackberry has very strong assets and is one of the most recognised portfolios in the industry.

"The question now is how much they're asking and what's on offer."

Shares in the company closed up more than 10% at $10.78.

The company dropped its Research in Motion name in January 2013 and rebranded as Blackberry, to coincide with the launch of the Blackberry 10 model.

In its most recent quarter, Blackberry lost $84m (£54m) and expects to lose more money in the three months to the end of August.

This story has been amended to reflect the fact that Blackberry's second quarter finishes at the end of August.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

Features & Analysis

From BBC Capital

Programmes

  • HoverboardClick Watch

    Testing the hoverboard that uses magnetic levitation - but will it ever replace the bicycle?

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.