Deal Would Take Ailing BlackBerry Private
DAVID GREENE, HOST:
The ailing Smartphone maker Blackberry announced that it has tentatively agreed to be sold to a group of investors for $4.7 billion. This is the latest troubling sign for a company that has been hemorrhaging money and has massive layoffs planned. Blackberry was once synonymous with Smartphones. Many of the people once addicted to these devices, though, have moved on to glitzier products.
We've got Bloomberg technology columnist Rich Jaroslovsky on the line with us. Rich, good morning.
RICH JAROSLOVSKY: Good morning.
GREENE: So is this the end of Blackberry?
JAROSLOVSKY: It's not the end, but it could be the beginning of the end, at least of the Blackberry as we know it.
GREENE: Well, what does this mean for people who own them? I mean are they gonna be able to upgrade to newer devices when their contracts run out and so forth or are they really gonna feel this?
JAROSLOVSKY: I think people will really feel this. Essentially what Blackberry has said is that they're going to try to retrench and focus really on the enterprise business, so the days of you going down to the local AT&T store, whatever, and buying a Blackberry for your own use clearly seem to be coming to an end.
GREENE: Shifting more of the enterprise business. So you're saying that it might come down to if you work for a place that has a contract with Blackberry, you might still have them, but otherwise it's gonna be much more difficult to find them on your own.
JAROSLOVSKY: That's exactly right. I think that it's expense and complicated to market directly to individuals and make one sale at a time. And instead the company may just try to focus on business customers and, you know, hope for bigger sales at one time.
GREENE: Well, one big entity that has used Blackberrys is the federal government, because they've always been seen as more secure than other devices. Is that going to remain the case?
JAROSLOVSKY: Well, it certainly is a market that they have a substantial presence in. At the same time, the presence in that market has been shrinking. Competitors - Samsung has a program it calls Safe, aimed at securing Samsung phones for enterprise and government use. And meanwhile Apple has the new iPhone 5s, which has a built-in biometric fingerprint reader.
GREENE: And Rich Jaroslovsky, this group that has announced that they might buy Blackberry for, you know, nearly $5 billion, how do they plan to make money if this deal goes through?
JAROSLOVSKY: Well, again, we don't know. But there are pieces of Blackberry that certainly do have some value, things like Blackberry messenger service. Those are ongoing businesses and they presumably would have some value, whether that's in a continuing Blackberry company or whether it's technology that they could sell or license. So there are different ways that different potential owners could go.
The Fairfax Group, which is the group that's leading the effort to purchase it right now, they haven't said that much about how they're planning to run the company if they end up in control of it.
GREENE: Rich Jaroslovsky is technology columnist for Bloomberg News, also a frequent guest on this program. Rich, thanks as always.
JAROSLOVSKY: Thank you.
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