BlackBerry plans an image makeover, calls off sale

by Sohini Bagchi    Nov 05, 2013

blackberry woes

The latest update from ailing smartphone maker BlackBerry is that it has scraped the plan to sell itself as against its earlier declarations. Instead, BlackBerry’s largest shareholder Fairfax Financial said that instead of purchasing BlackBerry and taking it private, the company along with an anonymous group of investors will invest $1 billion as part of a revised investment proposal. BlackBerry will also replace its CEO Thorsten Heins in two weeks, indicating another major image makeover. John S. Chen, the former chief executive of Sybase, will become BlackBerry’s executive chairman and acting chief executive, as per the company statement.

The year BlackBerry has been in the news quite often, albeit for not-so-good reasons. The smartphone maker surprised everyone in the industry with announcement of slashing its 40% workforce globally resulting in a loss of 4500 employees, and then its plans to go private following a quarterly loss of nearly $1 billion. Even the much-delayed launch of the BlackBerry 10 couldn’t save it from failure.

So, what lies ahead for BlackBerry would be the next obvious question.

“Focus on software, not devices”

Devices will no longer be the focus of the smartphone maker, as it does not see much of a future in devices, says Chen in a statement. He clearly mentions he wants to emphasize software and services — not devices. Analysts believe that this could mean the company might ultimately get out of the business of selling smartphones.

Heins, the former head of the company’s handset business, widely promoted the new line of BlackBerry 10 handsets to its customer, which unfortunately turned out to be a commercial failure. Chen says in the current scenario, BlackBerry employees need to start thinking differently about the company and accept that “we’re really not in phones but we’re in phones for software, for services,” he says adding that the company is looking to find an executive with a strong software and services background to head this division, he says.

In an interaction with CXOtoday a few weeks ago, Akash Mainra, Manager, Enterprise Sales BlackBerry, India also emphasized that the company is coming up with fresh initiatives in the areas of Cloud, BYOD, and enterprise solutions, giving a strong indication to its new lines of software business. He also assured assures that its mobile device management software will set it apart from other mobility management software in the market.

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Expected but an untimely loss

Analysts are not surprised this time when BlackBerry announced its takeover bid has collapsed. In fact many had anticipated.Fairfax head Prem Watsa Fairfax finally told media that taking BlackBerry private with borrowed money was not the way to go. “To load this company with too much debt was not appropriate. So, once we decided that a leveraged buy-out with high debt was not appropriate we didn’t push it any further. We backed off completely.”

Nevertheless, the decline of the BlackBerry has come shockingly fast, believe many in the industry. It always had an inspiring story to tell the world. The Ontario-based company that grew from a small technology startup into a multibillion-dollar company transformed the way businesses get connected, especially by pioneering on-the-go email. But over the last half a decade or so, BlackBerry could not sustain the market competition from the iPhone as well as Android-based systems that continues to lure customers with more attractive features and technology.

Analysts believe BlackBerry’s future is uncertain. “The direction BlackBerry is heading in is increasingly unclear, and all paths are quite challenging, and I don’t think this changes that, says an analyst at Atlantic Equities,” James cordwell, an UK-based IT analyst states in his blog.

(Read: What could have saved Blackberry from sinking?)

However, analysts also believe the software business especially in the area of mobile device management is in rage today, especially as allows IT departments to manage different devices connected to their corporate networks. It would be a game of ‘wait and watch’ to see whether the one-time leader in the smartphone industry can make a mark in its software business!