It’s Over: BlackBerry Seeks Exit Strategy

BlackBerry (formerly Research In Motion—RIM) this week revealed that it was “exploring strategic options” to save its rapidly declining business. That’s code for capitulation, and BlackBerry says it has created a special committee to explore a range of options, including an outright sale of the company.

“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,” BlackBerry Special Committee Chairman Timothy Dattels said. The committee notes that it will consider “possible joint ventures, strategic partnerships or alliances, a sale of the company, or other possible transactions.”

In other words, it’s over.

Related: "RIM Changes Its Name to BlackBerry, Announces New Handsets"

With less than 3 percent market share today, BlackBerry had controlled over 50 percent of the US smartphone market as recently as four years ago. But the arrival of Apple’s trendsetting iPhone was the first of many blows to the platform, and with Android dominating the market now in ways that even BlackBerry never did—it controls about 80 percent of the worldwide market for smartphones today—there’s no room for the dwindling Canadian firm. Even Microsoft’s Windows Phone is outselling BlackBerry by a growing margin.

It’s unlikely that any major technology firms will be interested in purchasing BlackBerry or establishing a Microsoft/Nokia-type partnership and trying to continue forward with the existing platform: All of the big players—Google, Microsoft, and Apple—already have their own established platforms. If BlackBerry gets desperate enough, however (and it will), it’s not hard to imagine the firm selling off its intellectual property rights to one or more of these companies. The value of this firm and its technology will only go down from here.

And it’s been going down for quite some time. In the most recent quarter, BlackBerry announced that it had lost $84 million on revenues of $3.1 billion while its user base shrank by four million users. And this was the quarter in which the firm launched the new BlackBerry 10 devices. Customers responded by largely ignoring the new phones, with BlackBerry selling just 2.7 million units. (By comparison, Windows Phone shipments surged 77 percent, year over year, in the quarter.) BlackBerry has laid off more than 5,000 employees in the past year.

Another option is for BlackBerry to take itself private. This would allow the ever-smaller company to make more drastic structural changes without the oversight of nervous shareholders. The firm did examine this option early last year.

Even the Canadian government has weighed in on BlackBerry’s collapse. “We recognize that BlackBerry is exploring strategic alternatives to enhance its competitiveness,” a spokesperson for Industry Minister James Moore said. “We wish it well.”

Related: "Thanks to Nokia, Windows Phone 8 Doubles Market Share"