The Board of Directors of the beleaguered smartphone manufacturer BlackBerry announced today that it is looking at "strategic alternatives" for the company going forward. The release read in part, "The Company's Board of Directors has formed a Special Committee to explore strategic alternatives to enhance value and increase scale in order to accelerate BlackBerry 10 deployment. These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions."
Rumors of a possible move to take the company private surfaced last week, jumping shares of the company's stock from $9.25 to $9.75; it jumped again to $10.25 on news of the Board's decision. Clearly sales of the new Z10 and Q10 models supporting the BB 10 operating system have not lived up to expectations, and the company lost $84 million in its most recent quarter. Over the past year there has been speculation that a possible acquisition of the company might be in the works, with names like Microsoft (highly unlikely) and Silver Lake Management being tossed about.
While sales of Android, iOS, and even Windows Phone-based devices have zoomed past BlackBerry, the company still has a solid niche. IDC recently pegged BlackBerry in fourth place in worldwide smartphone sales with 2.9% market share, behind Android's 79%, Apple's 13.2%, and Windows Phone's 3.7%. However, there are still pockets of BlackBerry support, primarily in regulated and very security-sensitive organizations.
The smartphone market continues to evolve, though the various implementations of Android have become the dominant factor, and its share of the market will grow even larger as the growth market for smartphones shifts to the developing world. Apple continues to boast a loyal following, though its price point, even with the planned lower-cost iPhone 4c (does "c" stand for "cheap"?), will make it difficult for them to gain much share in places like India and China--particularly since Tim Cook was not able to make a deal to get China Mobile to carry the iPhone; China Mobile is the world's largest mobile operator with 700 million subscribers. The iPhone's share of the Chinese market dropped to 4.8% recently.
A new business plan is in order for BlackBerry, but if the company is unable to expand its base, its only option to reach profitability will be to continue to shrink the company. However, you can only take that strategy so far.
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