BlackBerry stock spikes on Lenovo buyout mumble
Chinese CEO says deal 'makes sense'
Posted in Management, 12th March 2013 01:13 GMT
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Shares in BlackBerry, the company formerly known as both RIM and a world leader in smartphone shipments, jumped over ten per cent on Monday after Lenovo CEO Yang Yuanqing said that the deal would "could possibly make sense."
"External growth is all about opportunities," Yang told French financial newspaper Les Echos. "You can not rely solely on it to develop. So we will rely primarily on our own forces, while remaining vigilant on the market and its players. But first I have to analyze the market well."
Lenovo is on course to be China's biggest-selling handset manufacturer this year, but its strength is at the low end of the market, with almost no traction elsewhere. Yang said that Indonesia, Vietnam, or Russia are all on the agenda for the company's breakout from the Middle Kingdom – and that within two years Lenovo would be moving into Western markets in force.
Taking over BlackBerry could give the Chinese company a foothold in the West with an proprietary operating system and support and dealer networks in place. Lenovo has already shown it can still make a reasonable profit from the PC business, and is looking to make serious money in the smartphone sector next.
Yang's comments echo those in January from CFO Wong Wai Ming, who said that Lenovo was looking at opportunities, and mentioned BlackBerry as a possible partner. While BlackBerry's CEO Thorsten Heins hasn't explicitly ruled out a deal, he's going to want to make a go of it on his own – and has a $2bn cash pile, so isn't all that short of funds. But there may well be some shareholders who fancy getting out while they can.
But it's unlikely to be that simple – any deal would have to get past the regulators. One of BlackBerry's last strongholds in the US and (to a lesser extent) Europe is in its government business, and it's not clear how keen governments will be about entrusting that network to a Chinese company. ®
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Android is the only serious contender there. imo Lenovo should go for Windows Phone as they have lots of Enterprise customers. Android is far too insecure for that market.
The Blackberry model of dedicated network plus dedicated servers is redundant these days with the latest Exchange platforms. The only thing they have still really worth anything is their patents.
If Lenovo wants to enter the smartphone market, don't buy into an OS. You have your pick of Android, SailFish, Tizen, Ubuntu and Firefox.
Re: Not gonna happen
As Blackberry are very clearly dying, I think you will be surprised what will be allowed....
Not gonna happen
Canadian government will not allow this.
BBRY might liscence to Lenovo for a heafty fee though while ensuring QC.
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