BlackBerry Receives Takeover Bid Worth $4.7 Billion or $9/Share

[dtlee1974]

I manage the phone/email infrastructure for my company. We basically allow our users to pick out their phone from iPhone, Android, Windows or BlackBerry. As long as the device supports ActiveSync password enforcement and remote wipe, we're fine with it (or BB since the same can be done via the BB server.)

When I started two years ago in July, we had over 40 users out of 250 on BlackBerry. Last week, we had one. Needless to say, we're buying him an early upgrade and shutting the BB server down and taking them off the menu. No one wants what they're selling.

 

[firedept]

I sure hope this does some good. I had a blackberry when they first came out. Was a great phone and had it for years. Too bad they could not keep up with the times. With the right people and innovations I believe they could have stayed contenders in the business. They had a good product, just lagged behind.

 

[Makosuke]

So, that's about the same amount of money as Apple makes in a weekend, right?

I was about to note that, if you do the math, 9 million iPhones at an ASP of $550 and $650 for the cheapest model of the 5C and 5S and the 1:3 ratio that other article mentioned, the retail gross for the weekend was $5.6B at minimum, and could easily have been in the $6B range. Assuming 30% margin, that's $2B profit if you want to be really optimistic (it was probably rather less than that in reality).

Compare that to the $4.7B Blackberry buy. Or, if you factor in the $2.6B Blackberry has in cash, that they really only paid $2.1B for the company.

Which is to say that yes, Apple literally grossed considerably more on phones, alone, in one weekend than the entire value of Blackberry as a company. And if you factor in the cash-on-hand, Apple will probably make more profit this week than Blackberry is worth, total.

I've never owned a Blackberry, personally, but I'd actually like to see a strong 3rd competitor in the market (better yet, one that isn't Microsoft). It'd be nice if a smaller company like Blackberry were that competitor.

But when you put it in perspective that way, man, how the mighty have fallen, and after all the executive smack talk back in the early iPhone days, it's hard not to indulge in a bit of schadenfreude.

 

[inscrewtable]

Were it not for BlackBerry, we probably wouldn't have the iPhones that we do today. Sure, we can call their last few years "amateur hour," but from 1999 or so - they were the pros. The rest of the devices were amateur. It's easy to laugh this off, but there is a potential for more than 10,000 people to lose their jobs. They may be "amateurs" in your mind, but they have to put food on the table like we all do.

No one is mocking the employees. And the company were like a bunch of amateurs in that they were blinded by their success and should have seen future coming before it washed over them.

 

[TallManNY]

For an actual company no. To become a bigger patent troll yep.

http://www.theverge.com/2012/2/13/2796243/us-approves-nortel-patent-sale-microsoft-apple-RIM

I think you are forgetting about the Nortel patent portfolio.



I've never understood why that hocus-pocus reasoning gets past any reasonable scrutiny. Some cash can't be spent ( offshore etc .... it is trapped and only be spent on certain thing). Some cash is needed to operate the business profitable. Have to buy parts before can assemble and sell them into a larger system/device. (sure you could borrow all of that but then the bankers have you by the short hairs... Your business isn't their priority. ). Frankly "stuff happens" (recalls, support problems , etc.) some of that is self-insurance funds.

None of that really can be used to "pay back" the buyout costs without sucking the life out of the business. Vampire/Vulture Capitalists out to gut the company... sure. Actually out to get the company back up on its feet and succeed long term... the money largely has same positive purposes for being there now as it did before. Probably even more so in these buyout contexts.

Finally as pointed out in another post, most of these buyouts do damage to the company. Especially if they become protracted length process.

How much of the nortell deal did Apple actually spend? It was a consortium of companies who bout patents. Including RIM. Anyway good point that Apple has spent big in the past at least one time.

Anyway, it is valid to look at the cash even though you are right that most of it needs to stay in company for the time being. But in terms of what is actually being spent on BBRY the business it should be netted against the share price paid.

And if you get a loan for your working capital, it isn't that bad. Nearly every company out there uses debt. When you owe a bank a billion dollars there actually isn't that much the bank can do except hope you can pay it back. They certainly won't micro manage you and thereby take on the lender liability risk.
But BBRY getting a loan like that seems extremely unlikely. But once private we won't know how much cash is left in the company quarter by quarter until it either comes out as an iPo or it goes under for good.

 

[carmenodie]

Ladies and gentlemen as Queen would say:
ANOTHER ONE BYTES THE DUST!!!!!!!
Palm
GOOOOOONE!
Black Berry
GOOOOOONE

Who's next?
HTC

 

[quickmac]

The phrase "geared towards professionals and business users" doesn't really have any meaning in the modern smartphone world. Most smartphones (Android or iOS) are capable of fulfilling a business' needs. In a sense, all modern smartphones are geared towards professionals, as well as being geared towards consumers.

Yep. Security holes and flaws left and right, email that isn't even true "push email," no option for a physical keyboard if one wants one, lack of a simple notification LED, should I go on? The iPhone interface screams "toys and games" even IF that's not it's intention.

Yep the iPhone certainly is geared towards professionals. It's a consumer grade entertainment device first, communication device second. Nothing wrong with that but Blackberry devices were always communication devices first and foremost.

I know many professionals use iPhones (and Androids) for their daily lives and business needs. So in the end it is down to personal preference. But saying it's geared towards professionals? That's laughable. Ever see an iPhone ad showing people doing "work" or "email" on it. It's always playing games, reading, taking pictures, or video chatting in those commercials. And sometimes making a call or playing music. That's not to say iPhones can't work in a pinch for professional needes, but Apple certainly isn't purposefully positioning as "professional devices,: every ounce of their advertising is geared toward entertainment and consumer use.

 

[macs4nw]

It amazes me how people on this board make fun of other companies experiencing hard time. As much as i like my apple products the same thing can happen to apple…..

It's a sad story indeed, and nothing to be gloated over. A prime example of the pretty well 'life or death' importance of reading and following market trends correctly, unless you're the one 'setting' those trends. Ask Chrysler, who were a sliver away from bankruptcy in the late seventies, when they refused to build smaller, more fuel efficient cars following the oil crisis of the mid seventies, and kept producing large luxurious gas-guzzling vehicles that did not sell.

Take your blinders off sometimes and understand that nothing lasts forever so when apple starts to experiencing bad times which it will don't get all up in arms.

Companies indeed come and go all the time. No one stays at the top forever, and neither will Apple. We, the public, are fickle, ask any politician. But with hard work, sound planning, and correctly gaging were the industry is, or should be going (in addition to impeccable timing and a certain amount of good old fashioned luck), any company can remain the industry darling for a long time, and stay at or near the top.

 

[maxwelltech]

Kodak, Nokia, HP, and now BlackBerry, were all once mighty companies that fell because they had failed to forecast the future and adapt to it, and when they did it was already too late. I wish Apple could learn their lessons and be a lasting company.

 

[pure3d2]

although I've never owned a Blackberry, it's sad to see a company that was well done and put out a great product go down. They just joined the party too late.

They had numerous chances to turn things around. Did you forget what they kept saying when the iPhone first came out? They said that no one wants a smartphone without a physical keyboard on it. They didn't release a phone with a touchscreen until years later.

 

[Swift]

Communication device

Agree on those points, but in my eyes it is not a complete device when it fails to deliver in browsing and apps, when the competition is well established in those fields. I have broader needs for a communication device and BB failed to address those needs.

What Apple successfully demonstrated was that a communications tool was not enough. What we needed was touch-screen and apps. A smartphone is a little handheld computer first.

----------

Kodak, Nokia, HP, and now BlackBerry, were all once mighty companies that fell because they had failed to forecast the future and adapt to it, and when they did it was already too late. I wish Apple could learn their lessons and be a lasting company.

And they're not? 9 million new iPhones in the first weekend?

 

[peterdevries]

Yep. Security holes and flaws left and right, email that isn't even true "push email," no option for a physical keyboard if one wants one, lack of a simple notification LED, should I go on? The iPhone interface screams "toys and games" even IF that's not it's intention.

Yep the iPhone certainly is geared towards professionals. It's a consumer grade entertainment device first, communication device second. Nothing wrong with that but Blackberry devices were always communication devices first and foremost.

I know many professionals use iPhones (and Androids) for their daily lives and business needs. So in the end it is down to personal preference. But saying it's geared towards professionals? That's laughable. Ever see an iPhone ad showing people doing "work" or "email" on it. It's always playing games, reading, taking pictures, or video chatting in those commercials. And sometimes making a call or playing music. That's not to say iPhones can't work in a pinch for professional needes, but Apple certainly isn't purposefully positioning as "professional devices,: every ounce of their advertising is geared toward entertainment and consumer use.

Excellent points, but many business users expect the same kind of performance from their business phone as their private phone. I personally do not want to switch every time to my personal phone if I need a specific app or need to browse the web. My company refused to invest in the more expensive touchscreen phones from BB.

In addition I personally don't want to carry around two phones and rather have one business phone that I also use privately.

Not surprisingly the data costs have gone up significantly now colleagues are bringing in more devices into the BYOD program. We previously were bound to curves and Bolds, which are great for telephony and SMS, but we horrible for browsing. However thought of a combined touchscreen and keyboard phone with a buggy touch detection implementation should be removed from the business.

 

[HeHeHaha123]

The equity firm could buy the assets of Palm from HP and merge them with Blackberry into a new company called BoatAnchor.

ROFL they could go from BB to BA

 

[haruhiko]

Samsung et al got this early: for a mobile phone brand other than Apple, the only choices are to embrace Android, or die.

 

[iGrip]

Bought for patents?

That may well be the reason. In general, the parts might be worth more if they are split up and sold to different buyers.

The parts don't seem to be worth much put together the way they are now. Maybe they could be worthwhile in the hands of third parties.

 

[randyj]

Apple has $4.7 Billion in their couch cushions. My guess is if BB's patents were worth that, Apple would've snatched them up without a second thought.

Exactly! Even more so as BB had 2.6 bil in cash, so really only would have cost 2.1 bil.

 

[peterdevries]

Apple has $4.7 Billion in their couch cushions. My guess is if BB's patents were worth that, Apple would've snatched them up without a second thought.

The 4.7 Billion includes a lot of employees, unsold phones and a lot of other assets. The patents themselves must be worth a lot less.

 

[randyj]

The equity firm could buy the assets of Palm from HP and merge them with Blackberry into a new company called BoatAnchor.

Thanks! I have been smiling for 10 minutes since first reading your comment!!!

 

[entatlrg]

They need a person with the drive and forward thinking of Steve jobs to head the company.

Thorsten Heins was a joke of a CEO, without the right attitude to get the company going in the right direction ... the worst thing the company could've done at a time when they were already in serious trouble.

I hope they find good a good CEO and build a good new executive team that's not directed by engineers and off thinking number crunchers.

bBackberry can cater to a unique market and I think there is room for one company to make a device with a excellent qwerty keyboard because some users, particularly business users and people who type heavily on their phone want a qwerty keyboard. Design a good functional OS to complement the phone and with the right design and smart marketing they have a chance to cater to at least a small percentage of the market and keep going.

I wish them the best and hope they do well.

 

[Breezygirl]

RIB Blackberry


this shows how a company that was worth $84 billion at its highest can sink...


Apple should innovate if they don't want to end up the same way one day...

Yup, Apple in 5 years.

 

[quickcalibre]

I feel sorry for them, it's a bit of a shame, never have had anything against blackberry users, they're not like samsung users who like to take every opportunity and chance to get to tell me apple is rubbish.

 

[DOSNET]

Yep. Security holes and flaws left and right, email that isn't even true "push email," no option for a physical keyboard if one wants one, lack of a simple notification LED, should I go on? The iPhone interface screams "toys and games" even IF that's not it's intention.

Yep the iPhone certainly is geared towards professionals. It's a consumer grade entertainment device first, communication device second. Nothing wrong with that but Blackberry devices were always communication devices first and foremost.

I know many professionals use iPhones (and Androids) for their daily lives and business needs. So in the end it is down to personal preference. But saying it's geared towards professionals? That's laughable. Ever see an iPhone ad showing people doing "work" or "email" on it. It's always playing games, reading, taking pictures, or video chatting in those commercials. And sometimes making a call or playing music. That's not to say iPhones can't work in a pinch for professional needes, but Apple certainly isn't purposefully positioning as "professional devices,: every ounce of their advertising is geared toward entertainment and consumer use.

What on earth does advertising have to do with a device's capabilities? Ignore the advertising; it's almost all hyperbole anyway. The iPhone's business features grow all the time. It can more than do the job for the vast majority of professionals out there, which is why more and more businesses are approving iPhones.

 

[vmistery]

Well my Dad will be upset, other than him I know very few BB users now who are under 50. But going Enterprise only won't help Blackberry survive, people in these companies switched to iPhones et al because that is what people know at home and wanted / desired. If you make it cool amongst the current 20-40 somethings generation then as long as it can fulfil the general needs of the Business then the Business may go for it. They will also suffer because if a Consumer can't buy a BB it won't have any presence in a BYOD organisation!

 

[PlanetFree]

They have a chance if they adopt Android, skin it to be uniquely blackberry, and pair it with some great hardware. Kind of like what Amazon has done with the Fire.

Otherwise, I just can't see any scenario where they aren't completely toast.

From listening to my Blackberry owning friends they preferred Blackberry over Android because they didnt want to let google harvest their data (yeh not everyone likes shady googles antics). They would hate to use a product that was linked to Google/android. I hope RIM/Blackberry can bounce back even if its a smaller company its never good to hear of job losses even from competitor company.

 

[Bandit3dgfx]

Now we know why BBM was held back from app store and play store release