Speculation abounds, given the recent news that the BlackBerry board was exploring all options, as to who would buy the company. Theories range from Lenovo, which would use the company to launch its phones outside of China in a move similar to what it did with the IBM PC Company, to Microsoft, which eventually will need to move its Windows Phone platform back into business and government. While I think the Lenovo deal has merit and the Microsoft one is too big a stretch, two other companies that haven’t come up likely could both afford BlackBerry and find it even more valuable for their long-term goals. I’m talking about Amazon and Intel.
Let’s explore this.
Amazon is really the only Android platform company that can argue that it could create a secure version of that OS, largely because it forked the code and has more control than any other Android vendor – with the possible, though unlikely, exception of Motorola. Currently, it puts this platform on tablets under its Kindle brand, but it doesn’t have a phone, and there is no real connection between the Kindle and Amazon Web Services efforts.
Amazon Web Services is its comprehensive cloud offering but, like everyone else, Amazon largely lies above platforms like Windows, iOS, and Google’s Android, created by others. All three of these OS vendors have web services that compete in some way with AWS and, over time, tie ever more tightly to those services, potentially freezing Amazon out over the long term.
Having a client platform to work of off would give Amazon stronger defensive and offensive positions, allowing it to more aggressively push back on these competing vendors. And a solid AWS back end would give the BlackBerry platform a potential advantage and dedicated sales organization (Amazon’s) that it currently doesn’t enjoy. The end result would give Amazon a more strategic long-term client play and BlackBerry more breadth and a stronger value for its platform. BlackBerry would also give AWS a framework to move into parts of the world in which it doesn’t currently compete and an additional inroad into the automotive market through QNX, which it currently doesn’t have. In short, BlackBerry would be worth more as part of Amazon, which is one of the tests of a good acquisition.
Intel has been working to get its processors into smartphones aggressively, but has had limited success largely because the related platforms are developed for ARM, putting Intel at the same disadvantage most competing platforms for PCs and servers have had with x86. It needs scale. To get there, it needs a phone platform and OS, in volume, that favor x86 and will properly showcase its unique advantages. One of those unique advantages is a technology it developed with McAfee, another acquisition, called DeepSAFE, which provides a higher level of security than any mass processor currently in market and well beyond what anyone can provide on a phone.
One of BlackBerry’s historic advantages is that it is more secure than the alternatives. With Intel and DeepSAFE, BlackBerry would have a nearly insurmountable security advantage, access to Intel’s massive marketing war chest, and the ability to leverage Intel’s IT-focused resources to help sell its phones. One additional benefit is that Intel has been working to more deeply penetrate the automotive market and to more tightly tie devices based on its technology to in-car entertainment and maintenance. BlackBerry’s QNX, the BlackBerry 10 operating system also used in cars, would create synergies with that effort, putting Intel years ahead of where it would be otherwise.
This arguably would make BlackBerry even more strategic to Intel than it is to Amazon.
Wrapping Up: Big Acquisition, Foreign Country
The problem with anyone on the short list acquiring BlackBerry is that it is a big acquisition, which increases the likelihood of failure. Big ones are really hard to do, and BlackBerry is in another country, with unique laws that create risks for those that don’t know them. Combined, this will make the company harder to acquire because it increases both the risk of failure and the cost of that failure. However, Intel has demonstrated that it can do big acquisitions successfully, and Amazon should know Canada pretty well already, offsetting this risk for both firms.
Finally, this doesn’t have to be an either/or deal. Both Intel and Amazon could partner to acquire BlackBerry using the kind of creativity that EMC has used (Intel is in VCE, a similar partnership created by EMC). This is a long shot, but Intel and Amazon certainly aren’t natural competitors and are not likely to ever be competitors. This combination, if successful, would massively reduce the individual cost and risk, and significantly increase the chance for success.