Blackberry today formally announced its disappointing performance for its financial quarter ending August 30th. This was on the cards as we got early indication from our Monthly Market Pulse’s channel checks that the stuffed channels caused due to BlackBerry Z10 inventory build-up over the past six months will need a drastic price drop or a one-time write-off and as estimated both the things happened. In June/July BlackBerry dropped the price of Z10 across several markets as well as wrote off US934 million worth of Z10 excess inventory that is roughly 2.5 million units causing it to ship only 3.7 millions in the three month period.
However, there is a silver lining as BlackBerry last week signed off LOI agreement under which a consortium led by Fairfax Financial holdings will acquire BlackBerry for $4.7 billion taking the BlackBerry device maker private. Both Fairfax & Blackberry have until November 4 to conduct due diligence. The implications could obviously commence from change in future strategy, positioning for BlackBerry and will be up to the hands of Fairfax to restructure the Canadian OEM or sell off it parts or narrow its focus on enterprise market.
This creates a great opportunity for the recently led effort by Michael Dell who convinced investors on its $24.9 billion plan to take Dell,Inc private to have a look into BlackBerry as a potential acquisition which also have its roots and aims to focus and grow in enterprise. Both tech pioneers have equal footing in hardware, software and services space with similar struggles but with one in non-mobile sector and other in mobility. This could thus be the right merger which will complete each other.
We at Counterpoint Technology Market Research truly believe that there are lots of synergies between Dell and BlackBerry. These two should at least date and if all goes well get into an agreement to fuse into a privately controlled enterprise powerhouse , next to Microsoft or IBM.
– Neil Shah