The Problem(s) with BlackBerry

The Problem(s) with BlackBerry.

By David Docekal, The Hypercapitalist @DavidDocekal

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This week BlackBerry (formerly Research In Motion) announced plans to go private and agree to be sold to private equity/insurance firm Fairfax Holdings of Canada. Fairfax is in turn paying $9 a share for a stock that is currently worth about a dollar less. According to Reuters, Executives of the struggling company sold stock immediately following the warning of a quarterly loss and massive job cuts amounting to 4500 workers. It makes other investors wonder where their faith lies. Blackberry has been a household name for years by being the pioneer of the smartphone arena. The roots for the losses are not being attributed to its hardware product line (which has recently received positive reviews) but rather its software offerings. iOS and Android have featured popular apps such as netflix and instagram while Blackberry has not. The apps that Blackberry does carry, like Facebook, are not updated regularly by the developers. This approach to the software side leaves consumers wondering ‘Wheres the incentive?’.

To compete against Google and Apple, companies like Blackberry need to amp up their operating systems and app markets. Blackberry is still a popular platform with a sound following which includes President Obama. It isn’t too late for the hardware maker. This won’t be the end for this so-called household brand. Perhaps a move to Android is in order? A focus on hardware may signal a turnaround. I call this move the “Reverse-Sega”. Just make sure it has BBM…