BlackBerry considers strategic options including sale

Struggling smartphone maker BlackBerry Ltd confirmed yesterday that it is proceeding with a long-anticipated strategic review of the company including a possible sale to revive its sagging fortunes.

The company's board has formed a special committee led by Timothy Dattels, a board member and a senior partner at US private equity firm TPG Capital,  just three days after media reports on the possibility of the company going private (See: BlackBerry looking at private future: report)

''These alternatives could include, among others, possible joint ventures, strategic partnerships or alliances, a sale of the company or other possible transactions,'' BlackBerry said in a statement.

BlackBerry's strategic plan includes alternatives to enhance value and increase scale in order to accelerate the deployment of its new platform BlackBerry 10, launched earlier in January.

''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,'' Dattels said.

Waterloo, Ontario-based BlackBerry Ltd, formerly Research In Motion Ltd, is a Canadian technology giant which designs, manufactures and markets wireless solutions worldwide, through integrated hardware, software and services.

Its portfolio of products, services and embedded technologies that are used by thousands of organisations and millions of consumers around the world, include the BlackBerry wireless solution, the RIM Wireless Handheld product line, the BlackBerry PlayBook tablet, software development tools and other software and hardware.

The company reported a net loss of $84 million in the second quarter ended 1 June, compared to a net income of $98 million in the previous quarter. Revenue increased 15 per cent to $3.07 billion from $2.68 billion during the period.

The company which had occupied an enviable position in the global smartphone market has been on a downward spiral since 2011. After recording revenue of $19.9 billion for the year ended February 2011, it dropped to 18.4 billion in 2012 and further dived to $11.1 billion in 2013 due to increasing competition from the likes of Android and Windows Mobile-based phones and Apple's iPhone.

According to latest research data from global market intelligence firm IDC, Blackberry saw its market share decline during the quarter, reaching levels not seen in the history of IDC's mobile phone tracker.

In the second quarter, BlackBerry shipped around 6.8 million devices, representing a market share of 2.9 per cent, compared to 4.9 per cent a year ago and occupying the fourth spot in the highly competitive smartphone market.

Android-based devices lead the table with 79.3 per cent followed by Apple's iOs with 13.2 per cent and Windows Phone with 3.7 per cent.

The company's operating system BlackBerry 10 has shown steady progress which has grown to three models: BlackBerry Z10, Q10 and Q5, and additional mobile operators and a greater presence within its total volumes.

''It is still early days for the platform, however, and BlackBerry will need time and resources to evangelise more end users,'' IDC said.

BlackBerry's president and chief executive officer Thorsten said, ''We continue to see compelling long-term opportunities for BlackBerry 10, we have exceptional technology that customers are embracing, we have a strong balance sheet and we are pleased with the progress that has been made in our transition.''

Coinciding with the strategic plan, chairman and CEO of Fairfax Financial, Prem Watsa will tender his resignation to avoid conflicts during the process. Fairfax Financial is the largest shareholder of BlackBerry.

'Fairfax Financial has no current intention of selling its shares," Watsa said. 

Further to the news, shares in BlackBerry gained 10.5 per cent yesterday to close at $10.78 on Nasdaq, a fraction of the peak value of $140 for the stock reached in May 2008. The stock has fallen around 40 per cent from its January high of $17.90.

JP Morgan Securities LLC is serving as financial advisor to BlackBerry on the matter.