Blackberry Suitors Want Security, Not Phones

BlackBerry CEO Thorsten Heins

BlackBerry CEO Thorsten Heins

Officially, Blackberry is going private. It has a deal in place with its largest shareholder, Fairfax Financial Holdings, to buy out outstanding shares for $4.7 billion. Once off the market, the company would be free to refocus without investor scrutiny.

But that’s not stopping others from sniffing around Blackberry as a potential acquisition. Cisco reportedly has been looking over Blackberry in recent weeks. Now reports are surfacing that others, including Lenovo, Google, SAP and Amazon are taking a look to see if Blackberry is worth plunking down a few billion.

Blackberry’s fortunes have been on the downslope for years. Its handsets were the original smartphone, providing enterprise and government users – and eventually consumers – with the first viable and reliable mobile platform for receiving calls, texts and emails. While wildly popular in the early 2000s, Blackberry failed to recognize the draw of touch-driven smartphones such as the Apple iPhone and, eventually, Google Android. Like Microsoft’s Windows Mobile platform and Nokia’s conventional handsets, Blackberry has seen market share and revenues fall precipitously.

Even though Blackberry’s smartphone market share numbers have fallen into the single digits, an acquisition by a company without smartphones – such as Cisco or Amazon – would propel it to a contender position. An acquirer with smartphone business – Lenovo or Google – would give it another avenue for expanding distribution and sales.

At least that’s what the analysts say.

The reality is Blackberry’s prize is its mobile management and security technology. While Apple, Samsung and Google have swept the world with their smartphones and software, they remain vulnerable platforms that are only modestly trusted in enterprise and government environments. Blackberry’s proprietary architecture and security continue to make it the choice for users that want secure mobile communications.

Mobile technology continues to expand, and nearly every hardware and software vendor has some program for how to leverage mobile devices to drag sales of their traditional products and open new revenue streams for emerging technologies. Having greater mobile device management and security, such as offered through the Blackberry 10 operating system and the Blackberry Enterprise Service, which offers support across multiple mobile platforms, would be a tremendous prize.

Chances are Blackberry will not go forward in one piece. The smartphone hardware market is a tough business and many a vendor have tried and failed in it – Hewlett-Packard, Dell, Microsoft. More valuable is Blackberry’s software and patents. What could play out is a scenario similar to what happened with Novell, in which the patents were sold to a consortium of vendors and the remaining business was acquired by Attachmate.