Blackberry Saved from Bankruptcy, Acquired for $4.7 blnSeptember 23, 2013 - 2 minutes read
Once upon a time Blackberry ruled the roost, dominating the global smartphone market. Consumers as well as businesses large and small relied on Blackberry to keep them connected. As a tech head and iPhone app developer I fondly remember services like the company’s secure email delivery system and Blackberry Messenger (BBM). Unfortunately Blackberry stopped in their tracks while they were ahead, ignoring basic customers needs while Apple and Android beat the company into submission.
In the cut-throat world of high-technology, if you snooze you lose. Blackberry didn’t just snooze through the smartphone revolution, they’ve been in a comatose state on life-support.
Nowadays the ailing smartphone manufacturer is a shell of its former self. The company’s failure to innovate their product line and add features and functionality we take for granted today has left the company few prospects to catch up with the likes of Google and Apple.
The good news is that the company has avoided bankruptcy, announcing that they had reached an agreement to be taken private by a group led by Fairfax Financial Holdings. According to the NY Times, “The company signed a letter of intent that would pay shareholders $9 a share in cash, a deal that values the faltering smartphone maker at about $4.7 billion, according to a press release. Fairfax already owns 10 percent of BlackBerry”
Blackberry’s choice to go be acquired and go private presents a new set of risks and rewards. The company will be allowed to restructure without the fear of bad press tarnishing their reputation further. However, the lack of access to funds in the capital markets mean that Blackberry may be forced to take drastic measures to attain profitability again.
Blackberry recently announced that they would lay-off 4,500 employees which amounts to 40% of their workforce. As a London iPhone app developer it’s hard to imagine how Blackberry can ever be a serious competitor in the mobile space again. With quarterly losses of about $1 billion, low morale and a massive brain drain it will be interesting to see what direction the new owners choose to take.Tags: bbm, Blackberry, blackberry acquired, blackberry bankrupt, Fairfax Financial Holdings, london app development, ny times, smartphone, technology competition