Blackberry today announced a termination of its planned buyout and a replacement of its CEO Thorsten Heins with former Sybase CEO John Chen as an interim Chief Executive. A smaller ($1 Billion) round of funding will take place instead.
Going private and restructuring the company is in our view the most viable long-term path forward for Blackberry. Company needs a real strategy that is different from everything management has tried during the last 24 months. As a mobile phone maker Blackberry is "dead". It still has many users worldwide, it still has great technology, but the game is over and all the rest of it matters little. The question is: What's next?
We believe that Blackberry could be re-born as a mobile device company. Five years from now, mobile smartphones and tablets will be only one of many Internet-enabled smart devices. A broad spectrum of connected gadgets and sensors ranging from smart alarm clocks and thermostats (a la NEST) to cars, cargo containers and heavy industrial equipment, is likely to hit the market. The opportunity in this space is wide open and Blackberry at least has the technology and some remaining talent to deploy in this area. The company has hinted at the automotive market apps a while ago, but we do not believe it really focused and funded this effort in earnest.
One thing is clear, - if the new management team tries to once again revive Blackberry as only a smartphone maker, its chances for success are limited. Our expectation is that Blackberry will be bogged down for a while in survival mode and not be able to refocus on new opportunities till at least mid-2014, if at all.
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