BlackBerry has 1 good hope for a future

The beleaguered smartphone maker isn't going to survive on its own, but it has enough strengths to attract a buyer.

By Jonathan Berr Jun 28, 2013 3:35PM
The new BlackBerry Q10 is displayed for a photograph in San Francisco, Calif. on Tuesday, April 23, 2013 (© David Paul Morris/Bloomberg via Getty Images)When The New York Times' influential tech columnist David Pogue reviewed the new BlackBerry (BBRY) Z10 earlier this year, he apologized for doubting the future of the beleaguered Canadian smartphone company. In fact, he could barely contain his enthusiasm for the new device.

"It's lovely, fast and efficient, bristling with fresh, useful ideas," he wrote. "And here's the shocker -- it's complete. The iPhone, Android and Windows Phone all entered life missing important features. Not this one; BlackBerry couldn't risk building a lifeboat with leaks."

Walt Mossberg of The Wall Street Journal was impressed, too. "I believe it has a chance of getting RIM back into the game," he said, "if the company can attract a lot more apps."

Unfortunately for the company still officially known as Research In Motion (RIM), not enough consumers shared the enthusiasm of these experts. The company that once dominated the smartphone market now has about a 4.8% share, according to comScore. Its latest quarterly results, released Friday morning, were far more dismal than even the most cynical of tech pundits expected.

BlackBerry, best known for its physical Qwerty keyboard, had counted on the Z10 to give it a foothold in the touch-screen market dominated by the Apple (AAPL) iPhone and phones powered by Google's (GOOG) Android operating system.

BlackBerry, though, still has plenty of fans. During the past quarter, it shipped 2.7 million new BlackBerry 10 models, mostly the Z10 (Q10 is pictured). Unfortunately, that was far below analysts' estimates of 3.6 million.

But shares of BlackBerry, which plunged 27% by Friday afternoon, are getting to be too cheap to ignore. The company's brand and position in the info-tech departments of many Fortune 500 members will make it attractive to a private equity player or a larger tech company. Moreover, BlackBerry no doubt owns a large number of patents that can be licensed or sold outright.

The company's days of hyper-growth may be behind it, but it's hardly worthless. Cash flow from operations in the first quarter was approximately $630 million, down from $711 million a year earlier. It had a cash and investment balance of $3.1 billion.

BlackBerry's time as an independent company is coming to an end. The only questions are when will it get bought, and who'll be the buyer?

Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.

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2Comments
Jun 28, 2013 6:43PM
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Black berry owns the rights to the Palm OS system. There are a number of us out here who would be very happy to purchase a new smartphone that contained the Palm OS system. We don't necessarily want to watch movies but we do want to store data in an easily retreviable data base. Listen to us and put out a product using Palm.
Jun 28, 2013 5:47PM
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Author Berr  fails to realize that there is a hell of a difference between David Pogue's touting RIM and Walt Mossberg's subdued "RIM might have an outside chance" ( I remember the article)......he ought to be one of the Times' sadly deficient employees also.
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