Low demand for the BlackBerry Z10 has splashed cold water on the company鈥檚 hopes for a financial comeback, so Canada鈥檚 smartphone maker is now exploring 鈥渟trategic alternatives鈥� -- including its possible sale.
BlackBerry confirmed this week it was considering whether to look for a new owner, or start a joint venture, as it weighs its options.
鈥淓ssentially they鈥檙e admitting, to a certain extent, defeat,鈥� said technology analyst Carmi Levy. 鈥淭hey鈥檙e not where they want to be in the market, and they need to seek an alternative path.鈥�
BlackBerry launched its Z10 touchscreen phone and classic keyboard-style Q10 in a splashy campaign seven months ago. But the former tech giant, once a pioneer in smartphones, found itself unable to compete with the lure of Android and Apple devices.
Now, financial analysts say the company is running out of options.
鈥淚 think whatever they do is going to be drastic because you just can鈥檛 go up against the 800-pound gorilla, Apple,鈥� said Michael Decter, president and CEO of Toronto-based LDIC Inc.
Whichever option BlackBerry chooses, it will impact the retirement funds of many Canadians.
The Canada Pension Plan alone has about $69 million invested in the company, and the Ontario Teachers鈥� Pension Plan has millions more.
If BlackBerry goes private, it would avoid investor scrutiny and focus on its core products.
BlackBerry could also sell its patents -- worth billions of dollars -- at a bargain price.
鈥淒ell, HP, Samsung, Microsoft, Nokia, Amazon, these are companies rumoured to be interested,鈥� said Levy.
鈥淩ight now I expect they smell blood in the water.鈥�
One player that will almost certainly play a major role in BlackBerry鈥檚 future is insurance company Fairfax Financial.
Its chief executive, Prem Watsa, resigned Monday from BlackBerry鈥檚 board of directors to avoid any potential conflict of interest, as BlackBerry conducts its strategic review.
Watsa, who joined the board in early 2012, owns about 10 per cent of BlackBerry鈥檚 shares.
"I continue to be a strong supporter of the company, the board and management as they move forward during this process," he said in a statement.
"Fairfax Financial has no current intention of selling its shares."
BlackBerry board member Timothy Dattels, a senior partner at private equity firm TPG Capital, is heading the strategic review.
"Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives," Dattel said in a statement.
With reports from CTV鈥檚 Richard Madan and The Canadian Press
