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back to article BlackBerry inks deal to go private for $4.7bn

BlackBerry – or, as the struggling Canadian smartphone manufacturer has been renamed by the chattering classes, "Beleaguered BlackBerry" – has signed a letter of intent to be taken private by a consortium led by Fairfax Financial Holdings of Toronto, Ontario. Fairfax currently owns about 10 per cent of BlackBerry, and the …

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Moto X it is then!

Been debating whether to get a new OS7 BB device (never saw much value in BB OS10), or move to the Android camp by getting the Moto X. This news makes decision much easier. What would be cool is if I could run BB OS7 on the Android hardware.

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Re: Moto X it is then!

Good grief, what is it with people wanting to run one company's OS or kit on another company's OS or kit?

I'd quite like to play Commodore 64 games on my Oric-1, but it's not going to happen. BB's environment and inherent security relies on the vertical integration of hardware, OS, servers and network.

If one of iOS, Android or Windows Phone (or a feature phone platform) doesn't do it for you, it might be your requirements that are wrong.

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Re: Moto X it is then!

Enjoying BB OS 7 then going for Moto X running Android instead of BB's new Z30 running BB 10.2 is akin to getting gang-raped and thrown out then going back to the room asking if you could fight back this time...

...I'm a hardcore Android user but seriously, there's nothing in Android like the unified Hub or its running app/task mgmt of BB10 - if those things are important for you BB10, along with its new, smooth Android 4.2 runtime support (so you can mitigate the lack of native apps you have to have) should serve you for another few years (communication-wise BB10 is far ahead of Android, which is already miles ahead of iOS.).

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Anonymous Coward

Re: Moto X it is then!

Why on earth a bb7 device? You'd be paying for instant obsolescence. At least get a bb10...

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Re: Moto X it is then!

Let's see,

Cost of new phone: $99 US

Cost of NOT learning new OS simple to make calls, text, check/send emails, and maybe take a pic or two: Priceless. (Sorry Mastercard for stealing your line)

Believe or not that's how Apple or any other successful consumer company get to where they are. Find a product that works, and only make incremental updates that give consumers the impression that they don't have to lean anything new.

History's dust bins are filled with companies who had technically superior products.

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Re: Moto X it is then! @anoelmous cowerd

"Why on earth a bb7 device? You'd be paying for instant obsolescence. At least get a bb10..."

Corporates aren't adopting BB10 -- they can't be bothered to switch from the earlier OS when employees are happier with BYO (doubtless, mostly iPhones and Android).

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Re: Moto X it is then!

"Cost of new phone: $99 US"

Cost of Z10: $0 US...

...go on.

"Cost of NOT learning new OS simple to make calls, text, check/send emails, and maybe take a pic or two: Priceless. (Sorry Mastercard for stealing your line)"

Umm, see, I understand that you never tried any BB10 device and you're just trying to be a simple troll (and a very lame one at that) but seriously, what do you need to learn to make a call, send text when you have to do EXACTLY the same thing like on any other phone: tap 'phone sign' and type in the number, tap the little 'message icon' and type in your text etc etc... or you have some serious disability? If you do, I apologize, of course.

FYI for anyone ever used any modern GUI, even if only on a tablet, BB10 takes about 5, perhaps after that abomination called BB OS 7 it might take even 10 minutes to "learn" - but it will take only minutes if you have ever used an Android, WebOS or even the latest iOS7 (which is largely an unabashed copycat of WebOS, BB10 and a little bit of Android.)

If you don't know jack about something try checking out yourself instead of parroting stupid clueless wannabe tech bloggers' line, it's a lot less embarrassing to not to know something than being loudmouthed yet clueless.

"Believe or not that's how Apple or any other successful consumer company get to where they are. Find a product that works, and only make incremental updates that give consumers the impression that they don't have to lean anything new."

That's a very funny nonsense to claim today - right after iOS 7, this super-ugly "incremental" Apple update that actually changed GUI behavior, gestures, everything in a rather fundamental way... :D

"History's dust bins are filled with companies who had technically superior products."

Wait, I thought Apple was superior to everything...?

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Worth it?

Is the intellectual property and remaining value in the customer base worth $4.7 billion? I know some people who love the built in physical keyboard over the newer touch screen versions, but RIM, I mean, BB aren't the only people doing those...

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Unhappy

Worth it for patent trolls?

In the vein of your post, and possibly a sign of the times, my first thought when I saw the announcement was whether a patent troll syndicate would spend $4.7 billion in the hope of raking in far more through (threat of) lawsuits and settlements.

If the plan is to get some of the cash back then make more by going on a suing spree it would possibly be the biggest gamble the PTs have ever undertaken. Of course, anybody buying up pieces would want to gain some of that IP with it. So, could the consortium make all their $4.7b back by selling smallish IP chunks to the PT maggots descending on the carcass that was BB?

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Re: Worth it for patent trolls?

" So, could the consortium make all their $4.7b back by selling smallish IP chunks to the PT maggots descending on the carcass that was BB?"

Not from that alone. But there's plenty of value in a dead dinsosaur.

Bear in mind that even in decline and making accounting losses, Blackberry have turned about $2bn a year of cash from operations last year. So there's the sum of the IP sold to the maggots, but there's also the cash from operations during a controlled run down.

Admittedly they made zip from cash in the last quarter, but if you look at where the money went you can see diamonds in the dirt. For example, they spent $358m on R&D last quarter. If the business is no longer one with a long term future, then close or sell that, and pocket the savings. Likewise, the losses of the last quarter include $180m of amortisation, which is not a cash item (money spent long ago, being moved round the accounts). Again, as a dying business you can (they have perhaps already) taken out at least $150m of cash spend from sales and marketing, which together with the end of R&D would yield up perhaps $500m of cash from operations a quarter. On an annualised basis Fairfax should be able to ring out about $2bn a year of cash from Blackberry in the next twelve months, maybe $1bn the following year.

Then there's the assets on the balance sheet. In very rough terms, add in half of the $2.2 bn of property plant and equipment, the circa $3bn of investments and cash, assume they only get $0.5bn from the patent trolls, and Fairfax have found $4.6bn down the back of the sofa.

Pulling the declining cash from operations together with the asset sales, you can see that Fairfax will make $7.6bn for an outlay of $4.7, assuming they simply let the customers evaporate, rather than sell BBM or the enterprise customers en bloc. And as Blackberry have already announced the firing of 40% of the workforce, potentially much of the costs of dismemberment have already been incurred. If you could sell any of the customer bases to Microsoft or others, then potentially there's another billion or so.

Alive, Blackberry is a difficult business to make money and keep as a long term business. Dying or dead it is a goldmine so long as you don't have to pay too much for it.

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Sad end for a once great company...

... other tech titans take note - collapse can come surprising quickly

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Re: Sad end for a once great company...

It will interesting to see who will be next.

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Re: Sad end for a once great company...

"It will interesting to see who will be next."

No, it won't be, because it'll be HTC.

Turnover cratered to a third of its 2011 high, operating margin down from 9% to 1.5%, NT$20bn of cash used in operations last quarter, executives fighting to get out of the door, executive fraud.....

All of two weeks ago I wondered in a posting who of Nokia, Blackberry and HTC would be first to enter the mobile makers graveyard, and we've since seen two of them roll over on their back. Unless things look up at HTC (which seems unlikely to me) then HTC will soon crash and burn, and be bought probably by somebody like Lenovo, or one of the less well known Chinese makers who want access to brand and know how that is better than their own.

Curiously that might mean that whilst the Nokia name will disappear as the brand fascists of Microsoft borg the business, and the Blackberry name is buried in a shallow grave north of the artic circle, the HTC name might survive as a front for somebody like Sagetel, Haier, Meizu or the like, along with possibly the HTC manufacturing and design.

OTOH, maybe HTC will spring back from the edge of the precipice. But mobile phone makers don't seem very good at that, when you think about mobile phone tombstones with names on the like Ericsson, Siemens, Nokia, Blackberry, Panasonic, NEC. Motorola and LG have been looking a bit troubled as well.

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I can hear a swansong in the distance. If the company can't start making money and a tangible turnaround in private hands then I fear it may be put out of its misery.

RIP, BlackBerry. You had a good innings and a very solid start in life. You have made and left your mark on the world no matter what the naysayers might think.

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Facepalm

So the last of the legacy mobile device manufacturers collapses....

Motorola Mobile bought out by Google. Nokia bought out by MS. Ericcson essentially chased out of the market years ago. Now RIM/BB gets bought up by private equity. That's a lot of multi-billion $ businesses getting throttled in the last 5 or so years.

Now to see if there is an effort to keep the company going into the future, or just to manage the decline while milking Blackberry's intellectual property cash cow.

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Trollface

Re: So the last of the legacy mobile device manufacturers collapses....

Sony?

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Anonymous Coward

Re: So the last of the legacy mobile device manufacturers collapses....

The hardened industrial OS business will continue - the continued operation of quite a few nuclear power stations depends on it. The phones business is finished - they can milk the teen market who are using BBM for two or three years but that's about it.

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Re: So the last of the legacy mobile device manufacturers collapses....

Ericsson says hi and that they are still doing fine as a giant telecom systems solution provider, they just quit this consumer-oriented hamster wheel called handset market. Motorola was pure patent acquisition for Google and Nokia was total inside takedown in Trojan-style, the board was either onboard (sorry) or was the planet's stupidest and most incompetent, clueless board and didn't notice it until the last moment.\

All are completely different stories.

BB, on the other hand, was taken down by its own stupidity and incompetency, concentrated solely at the top, starting with Lazaris and continued with his hand-picked successor, TH, the current CEO and his super-sweet walkaway package in case of a sale etc.

It wasn't obvious to happen - as an ex-RIM-hater I actully admire BB10 for a lot of things, too bad it was in the hand of these incompetent shills...

...that being said going private *MIGHT* till give them enough time to round it (BB10) out properly, along with some nice exclusive stuff, aimed at enterprises and professional users. Time will tell.

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Anonymous Coward

Re: So the last of the legacy mobile device manufacturers collapses....

Actually Ericsson will not be doing so fine as a giant telecom systems solution provider in the longer term because Huawei are in the process of taking that market from them.

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"Beleaguered BlackBerry"

Is it me or it's indeed these super-clueless pseudo-journos and their really pathetic epitheton ornans that make all these articles so cheesy, such a bad read...?

Or is it something else? I mean it's one thing to see this constant onslaught of lame-clueless scribblers piling on companies for selling "only" ~6M phones in a quarter with hefty profit margins, calling it a disaster, while cheering for others selling similar quantities with almost zero profit as the opposite (eg 'strong uptick in sales') but the way these visibly clueless online goons kicking and gleeing over everything that isn't their fav (in this case the fruity type) is kinda disturbing...

...and worst: they are even unable to come up with anything remotely original on their own - "Beleaguered BlackBerry", dear Jesus in heaven, really?

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Re: "Beleaguered BlackBerry"

@Levente Szileszky,

"...and worst: they are even unable to come up with anything remotely original on their own - "Beleaguered BlackBerry", dear Jesus in heaven, really?"

Well, a $billion loss in a quarter for a company of Blackberry's size is pretty bad, and definitely well down the road to terminal if not dealt with.

Being taken private is probably the best way to deal with it. They may even do quite well unencumbered by dullard shareholders wanting their firm to take on the likes of Apple, etc. Far better that they focus cleanly on what they're good at; a high security platform for those who want that above all else.

Problem is that I think that their core market is being taken away by company accountants reckoning on BYOD being cheaper for their employer. And of course all accountants of course know everything about IT security and the consequences of getting that wrong.

What Blackberry need above all else is a massive and public disaster in a large famous company to be traced back to a rooted and compromised Android BYOD employee phone. That'd focus minds somewhat.

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Anonymous Coward

Re: "Beleaguered BlackBerry"

....got that right, bazza!

Nice one.

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Nice one, fellas

Blackberry is the classic self fulfilling prophecy. It has taken years of pundits saying they are going down the tube to discourage people from buying them and ultimately lead to their downfall. Expect the same from iOS now as Steve's death will of course lead to the downfall of Apple in the creative mind of hacks everywhere.

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Re: Nice one, fellas

And they didn't exactly help themselves.

Apple might take 40% of your app sales, but at least they have a way of you getting 60%

Between BB's appalling tools, their flip-flopping on native vs flash and their announcements of a new OS which would make all your existing app development obsolete - just we aren't telling you when or what in advance. And a development sign up process that seemed like something out of an adventure game - they didn't make it easy for people.

If their business model was that BBM was the only app that was really going to be supported on their phones - they should have just said so.

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Re: Nice one, fellas @Yet Another Anonymous coward

"And a development sign up process that seemed like something out of an adventure game - they didn't make it easy for people."

Similar to my feeling as a user. Up against a "our way or the highway" corporate quite willing to waste my time with apparently pointless downloads and reboots when I simply wanted to install an app from my telco.

Reminds me of a brush with Cisco's website, so gigantic and terrifyingly serious it seemed to have been designed by Albert Speer. Took ages to find a simple wireless adapter driver -- which then didn't seem to work. Vowed to stick with Netgear after that.

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Anonymous Coward

Best to focus on diddling the shareholders

Incompetent management refocused on maximising their grab in the privatization and leaving squat for the employees and shareholders. Focus at last!

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Fairfax bids to buy Blackberry

That was the title in the article about this on Yahoo! I wonder if I was the person who intiially scanned this as "Filofax bids to buy Blackberry"!

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Headmaster

Signs

The word you're looking for is "signs".

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