With Microsoft buying Nokia this week, people are beginning to ask about BlackBerry’s future since its board is actively looking to selling all or part of the company or take the firm private. BlackBerry has a number of incredibly valuable assets and still has what appears to be the strongest cellular phone position in government and large enterprise—both very difficult segments to penetrate—and, in an unsecure world, it offers the most secure mobile solution.
The two companies that would benefit the most from owning BlackBerry, and thus could pay the most for it, are Intel and Lenovo, but there are problems with both firms. Intel doesn’t want to go into the smartphone business and Lenovo doesn’t want to be a platform company. While considering both options, it suddenly occurred to me, why couldn’t the two firms collaborate to buy BlackBerry and then separate the firm along interests? This could give both companies more for less and result in a far stronger result.
Intel needs a strong mobile beachhead; it has a number of design wins but really isn’t much of a player on mobile phones, which is the core of the latest set of battles (the tablet market has been softening of late). In addition, it has a massive initiative to penetrate the automotive market more aggressively in both car control and audio visual systems. It has one technology that could redefine the mobile landscape called Deep Safe—a technology that it jointly developed with its McAfee subsidiary, which could ensure that some of the worst malware currently infecting smartphones wouldn’t work on Intel’s platform.
With BlackBerry’s already market-leading position in enterprise and government founded largely on the security and management of the BlackBerry 10 platform, the end result would be significantly better for professional segments than the alternatives, giving Intel the potential to go from underdog to major player far more quickly. However, if it actually has phones to sell, this would alienate the partners it wants to nurture and dramatically limit the company’s ability to market the resulting technology to other smartphone makers.
Effectively, Intel would have to articulate a plan to shut down or sell the phone side of the business and that would be problematic. But BlackBerry would give Intel a solid position in an area where it already excels, security and device management, and put the company on the map, albeit as a trailing vendor.
Lenovo is a power in China with smartphones but has been unable to move out of that country in any significant way. It isn’t seen as a major international player in terms of phones. However, the company is the number-one PC maker in the world and its ThinkPad brand is considered to be the most powerful in the same business segments that BlackBerry still dominates.
The BlackBerry phone would allow Lenovo to leverage its business market position and showcase the company as a vendor that can take mobile devices (that aren’t laptops) internationally. However, Lenovo isn’t set up to manage developers and would have to become far more Apple-like than it is. Lenovo would also get an OS and an automotive market that it currently isn’t interested in, and having a platform would put the company at odds with Microsoft, which could hurt its now favored position with that company.
Strategically, the company would have to consider moving to Windows Phone, which would be problematic given the Nokia acquisition by Microsoft, or to somehow downplay this platform to minimize its collateral damage with that relationship. So Lenovo would want the phones but would just as soon have someone else handle the platform and, at least currently, it has little interest in the automotive market.
So while BlackBerry would dovetail nicely with Lenovo’s device strategy, parts of the company would be counter strategic and selling those off might end up putting some of that core technology in the hands of a competitor, making that path even more difficult than it would be for Intel.
Wrapping Up: Partnering
One of the most interesting companies on the market is VCE, a collaborative effort among VMware, Cisco and EMC, which hopes to provide a joint best of breed solution. What we often forget is that it has a silent partner in Intel, which stands behind these vendors with its vast technology portfolio. A similar creative approach to this problem would have Intel taking the platform and patents, with Lenovo getting licenses and the phone line. The resulting company, which could still stand separate, would be backed by the combined resources of Intel and Lenovo, easily matching Samsung’s and Apple’s financial capability while not forcing either company to compromise existing relationships. Well, any more than they are already, because Intel’s relationship with Microsoft is already rocky and it has been supporting/funding alternative OSs for some time.
While clearly complex, but with VCE as the example of success, the result would be workable and also create the highest value for BlackBerry and thus the highest price for the company, as well as pleasing its existing stockholders the most. Lenovo and Intel have a good history of working together and both have partnered broadly but successfully on a regular basis.
My opinion is that the best answer for BlackBerry may not be Intel or Lenovo but Intel and Lenovo. What do you think?