BlackBerry just signed a letter of intent on a deal that would take it private.
The offer was led by Fairfax Financial Holdings Limited and the transaction would value BlackBerry, once the dominant force in smartphones, at around $US4.7 billion, or $US9 per share.
The deal caps a long decline for BlackBerry:
- BlackBerry smartphone shipments were only 5.9 million in the most recent quarter, which is a 26% year-over-year decline (see chart, below.)
- Only four years ago, BlackBerry held a significant 21% global market share against all the other smartphone platforms. Today, that share has dwindled down to under 3%.
- BlackBerry’s recent struggles mean that Microsoft has definitely secured the third place slot in the mobile platform race (even if Google’s Android and Apple’s iOS are way ahead).
BlackBerry’s misfortune can be tied to the success of Android and Apple on both the consumer and business side. Consumer demands, not business users, dictated the pace of the smartphone market in recent years, which benefited vendors like Apple and Samsung.
Meanwhile, BlackBerry also ceded its stronghold on the enterprise side of the market as Apple and Android products became more business-friendly.
BlackBerry also failed to hold on to a solid third place in the smartphone market while Android and Apple made meteoric rises. Its smartphone sales slumped after peaking in late 2010.
It’s unclear how Fairfax will handle BlackBerry’s smartphone business once the company is private. BlackBerry had also mulled over selling off business lines like BlackBerry Messenger and its smartphone security technology.
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