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10/3/2013
05:23 PM
Ryan Harris
Ryan Harris
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BlackBerry's 11th Hour: How It Can Survive

To pull out of its death spiral BlackBerry needs a financial savior -- plus the willingness to promote the heck out of cool-but-neglected features like the keyboard and multitasking.

BlackBerry 10: Visual Tour Of Smartphones, OS
BlackBerry 10: Visual Tour Of Smartphones, OS
(click image for larger view and for slideshow)
This is BlackBerry's 11th hour. With a tepid buyout bid on the table and a lukewarm release of the Z30 behind it, it plans to lay off 40% of its workforce, according to CNN, and it lost $1 billion in the third quarter of 2013.

Unsold BlackBerry 10 inventory is largely responsible for the disastrous last quarter. Fairfax Financial, a Canadian insurance company, will give BlackBerry until Nov. 4, 2013, to accept its offer to buy the company for $9 per share. Fairfax, BlackBerry's biggest shareholder, could wind up in a bidding war if another player comes on the scene, but as of now, no one else has officially stepped up.

Cisco, IBM and Microsoft have been discussed as potential buyers. BlackBerry would have to pay Fairfax $150 million should another offer come in higher than Fairfax's.

The company's dreary quarterly report also includes news that BlackBerry's focus would shift from the consumer market to a bolstering of the corporate sector. However, BlackBerry's business accounts have been jarred loose by rivals Apple, Google and Microsoft because of BYOD programs, enhanced security features and improved email delivery.

[ How BlackBerry rose and fell: BlackBerry: The Fax Machine Of Its Era. ]

A backlog of phones that few people want is not BlackBerry's only problem. Aside from being crowded out of the smartphone market by Apple, Google and Microsoft, BlackBerry is also losing ground to smaller firms that do mobile device management (MDM), such as Airwatch, MobileIron and Good Technology. At this rate, it'll take more than Fairfax's buyout offer and a spike in BlackBerry 10 sales to keep the former icon from being broken apart and salvaged for its patents.

So, What's The Answer?

The sun hasn't yet set on BlackBerry. Whether Fairfax or another bidder takes the risk, the strategy must be swift and decisive. BlackBerry, in whatever form, will have to meld both the past that created its market and the future that dictates it.

BlackBerry is in the deepest trouble of its life, but there are still tactics it can use to stay afloat. Here are some suggestions.

Stay The Same …

What's BlackBerry have that Apple doesn't? The company should keep these points in mind as it takes the fight for survival to Android and Apple.

Emphasize The Keyboard

Apple devices are the most beautifully designed on the market. But BlackBerry's keyboards -- physical and virtual -- are still the standard in functionality. The feel of the physical keyboard -- a contributor to BlackBerry's ugliness in many users' minds -- is often preferred over iPhone's virtual keyboard because of its ease of use.

Even BlackBerry's well-liked virtual keyboard provides a level of trust and intuition that iPhone has yet to achieve. It's not easy to find sites and social-media posts about awkward BlackBerry word-correct mistakes. The same can't be said for Apple.

BlackBerry's keyboards are accurate and intuitive. Above all, the physical keyboard still reacts more naturally than anything on a touchscreen. Users who started their smartphone experience with this standard know only the frustration of trying to type quickly on a touchscreen keyboard and the autocorrect antics that come with it. Potential BlackBerry converts -- or the consumer raised on movie/music/photo app smartphones -- might see the BlackBerry physical and virtual keyboards as archaic. But those who use their smartphone for business primarily, and not playtime, tend to prefer the keyboard that works best.

Show Off That TimeShift Camera

Something Apple doesn't have: A TimeShift camera. It takes a rapid series of pictures and allows the user to set apart faces in a photo, and select the best shot. This is particularly helpful for group shots or pictures of kids. Or anyone who blinks when his picture is taken.

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melgross
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melgross,
User Rank: Ninja
10/4/2013 | 3:21:45 PM
re: BlackBerry's 11th Hour: How It Can Survive
A year ago, I MIGHT have agreed with this. Two years ago I certainly would have agreed with this. But it's too late now.
Lorna Garey
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Lorna Garey,
User Rank: Author
10/4/2013 | 4:06:57 PM
re: BlackBerry's 11th Hour: How It Can Survive
I dislike seeing technologists almost gleefully wishing for a two-provider marketplace and burying MS and BB. Competition is a good thing, remember! Why would anyone want a world where your choice is Google/Samsung or Apple? HTC just posted a loss even though the One is a fantastic phone. Be careful whet you wish for, Mel ...
melgross
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melgross,
User Rank: Ninja
10/7/2013 | 12:11:03 AM
re: BlackBerry's 11th Hour: How It Can Survive
Lorna, you're making a big mistake. Never assume that you know what another person is thinking, because you most certainly do not know what I am thinking.

Being realistic about something is not the same as hoping that it will happen. But at this time, it's clear that Blackberry has had it. If you can't see that, then you aren't looking hard enough. We get these pundits like Harris who don't know what they're talking about say things that aren't reality. Why? Because they have to write something, because that's how they get paid. And with all the gloom, rightly deserved over Blackberry's future, an article that goes the other way will get more clicks.

But if you hang out at the sites where someone will write drivel like this, then you're missing the big picture. You need to look at what has happened over the past few years in the industry, see where Blackberry was, where they are now, and how they got here. Then look at their leaders.

If you do, you won't think they can be saved either.
Lorna Garey
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Lorna Garey,
User Rank: Author
10/7/2013 | 1:26:41 PM
re: BlackBerry's 11th Hour: How It Can Survive
I was joking, but point taken. I also tend to agree that BlackBerry is toast on the consumer side. However, I disagree that there's no substance here. BB has some good technology -- $4.7 billion may be high, but are you arguing that Fairfax is throwing that money to the wind with no plan?
melgross
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melgross,
User Rank: Ninja
10/7/2013 | 8:40:18 PM
re: BlackBerry's 11th Hour: How It Can Survive
Yes, I absolutely believe that Fairfax is in desperation mode. You have had to follow this entire saga from day one to understand what is happening.

Watsa, who is called the Canadian Warren Buffet, because his company mimics what Buffet does, abet on a smaller scale, has invested heavily in RIM over the years, the one way his company differs from BH. But he's lost big in those investments, losing billions in the process. His investment has shrunk to about $450 million, with 10% of the shares.

Now, think of what's happened. He's made this offer, but refuses to put any more of Fairfax's money into it. He announces that the rest is with outside investors (no other large stakeholder in Blackberry is involved.) but he, so far, has refused to name any of those other investors. Odd, no?

Then we have the timing. This occurred not before the devastating last quarter results were given the preliminary announcement, but after, an announcement he knew about because he sits, or sat on their board at the time. Why then? The value of the company is much less now. And the timing is suspicious. Blackberry announced that they will cancel the normal analyst call because of the offer. Hmm! Now no one can ask Heins and the others any questions about the state of the company.

And even though Watsa says that he has the deal in place, and Blackberry supposedly has accepted that deal, he's got an alternate plan in place. One that will saddle the company with $4 billion in debt. But this will allow him to suck over a billion out of the deal for his company. Not making up the long term horrendous losses he's suffered, but making a great profit on his current investment.

Whatever happens, Fairfax won't lose money in this deal vs the current value of their investment as they aren't adding to it.

Very strange, isn't it?

And now, despite supposedly accepting this deal, Blackberry is contacting several companies to ask if they are interested in buying them. This is very odd. I've never seen anything like this mess before, and I've been doing this since I was 13, and that's 50 years.
melgross
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melgross,
User Rank: Ninja
10/7/2013 | 8:45:57 PM
re: BlackBerry's 11th Hour: How It Can Survive
I also wanted to point out that I disagree with the valuations given Blackberry for the various business they have. It's all way overvalued. Much of that technology has no value of its own once the phone business dies. It's all tied to the sale and use of Blackberry phones. This is something that few commentators seem to understand.
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