Ten years after it launched its first smartphone, BlackBerry (BBRY) may be nearing the end of an era. Today the company said its board has formed a special committee to explore strategic alternatives. The Canadian company’s largest shareholder, Prem Watsa of Fairfax Financial, is resigning from the board due to potential conflicts of interest that may arise as the board explores options that will almost certainly include a breakup or sale of the company.
BlackBerry currently has less than 3% of the smartphone market, and analysts say it has cut orders for the Z10 and the Q10 to a combined total of just a million a month. BlackBerry’s new Z10 and Q10 smartphones were meant to instigate a turnaround for the company whose products have been eclipsed by iPhones and Android devices during the last five years. The Z10 is BlackBerry’s first touchscreen smartphone, and the Q10 combines a touchscreen with BlackBerry’s traditional QWERTY keyboard. The new phones have not gained a lot of traction with consumers, and many of BlackBerry’s former corporate customers are now reluctant to invest in its products when so many of their employees are bringing iPhones to work.
BlackBerry could split the company into parts, as its software business could be of interest to potential buyers. The company’s BBM Messenger service remains very popular, especially in India, and BlackBerry has promised to make it available for iOS and Android. BlackBerry has also developed a mobile device management solution for corporate customers that plays to its traditional strengths in encryption and security.
Privatization could be another option for BlackBerry. Late last week Reuters reported that the board has held talks with Silver Lake Partners, the same private equity firm that is helping Michael Dell try to take Dell private. If Silver Lake ends up with control of both companies it could realize some synergies in the enterprise hardware and software markets.
If BlackBerry does go private, its time as a public company with the BlackBerry name will end up being very short. It has only been a few months since Research-in-Motion (RIM) renamed itself BlackBerry and changed its ticker symbol to BBRY.
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