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BlackBerry patents, software are valuable: analysts

James Hutchinson (via AFR) | Aug. 14, 2013
Troubled Canadian smartphone maker BlackBerry could be split into multiple businesses as part of a potential sale of the company, analysts say.

BlackBerry patents, software are valuable: analysts
Shares in BlackBerry rose to a six-week high after the company announced the possibility of a buyout. Photo: Reuters

Troubled smartphone maker BlackBerry could be split into multiple businesses as part of a potential sale of the company, analysts say.

The company's board said on Tuesday it would explore a buyout and other ­strategic options as it sought to address an "evolving industry and competitive ­landscape".

Once known for its strong share of the lucrative enterprise smartphone market, the company posted a 40 per cent drop in revenues to $US11.1 billion ($12.2 billion) and a $620 million loss for its 2013 fiscal year in March.

Shares rose on the Nasdaq to a six-week high after BlackBerry's announcement, fuelling industry speculation of the board's potential plans.

Analysts said that while the company was best known for its keyboard-laden smartphones, its most valuable assets were likely its expansive patent portfolio and software business, whose products are used extensively in cars as well as security and medical devices.

Telsyte telecommunications analyst Foad Fadaghi said BlackBerry could  ­follow a similar path to Motorola ­Mobility, which Google bought in 2011 for $12 billion, mainly for its patents.

However, he said such a move would likely require BlackBerry's privatisation from the Nasdaq first.

"It's looking less and less likely that the company will be a dominant smartphone player. It could still be a profitable player," he said. "There's a been a lot of doomsayers in the past but they've really just looked at the performance of the smartphone [business]."

BlackBerry's share of the Australian smartphone market fell to 1.3 per cent in June, with sales slipping to 0.3 per cent, according to Kantar Worldpanel ComTech.

Much of its traditional user base in major enterprises and government agencies have since ­abandoned support in favour of fleets of iPhones and Android-based smartphones or tablets.

Losses in local customers even sparked a recent visit from BlackBerry president and chief executive Thorsten Heins.

Gartner telecommunications analyst Geoff Johnson said BlackBerry's market share was likely to drop further as businesses change over their fleets.

"The brighter spots are in consumer and emerging markets like Indonesia, not the traditional markets like enterprise and security," he said.

Mr Heins said the company was still focused on its current slate of smartphones and accompanying software.

The special committee exploring options includes company chairwoman Barbara Stymiest and Mr Heins, as well as former executives from Verizon and Sony Ericsson.

It would be chaired by BlackBerry director Timothy Dattels, a senior partner of private equity firm TPG Capital.

JP Morgan will advise the company financially on any options.


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