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BlackBerry: The End Game

Stocks in this article: BBRY AMZN AAPL EBAY BBY MSFT NOK HPQ

These developers and influencers don't buy smartphones from operators, let alone enter into operator contracts. They buy unlocked iPhones for $649 and up directly from Apple (AAPL) and Nexus devices for $299 and up directly from Google (GOOG). They don't want to be tied to any one carrier as they frequently swap SIM cards.

These people will not buy a carrier-branded smartphone, and they certainly won't do so if it means entering into a two-year contract. As it stands, this will keep them from buying a BlackBerry 10 device until BlackBerry starts offering these devices directly, free from carrier influence, SIM locking and without any contract.

Yes, T-Mobile USA is now taking a positive step in this direction, but it's not the same as BlackBerry itself offering BB 10 devices for cash, unlocked and carrier-neutral in every way.

Why doesn't BlackBerry sell to these developers and influencers directly from its Web site, or even from Amazon (AMZN), eBay (EBAY) or Best Buy (BBY)? Certainly the carriers should not feel threatened by this because these people will be using their network services anyway, just on a pre-paid SIM card basis.

The fact that BlackBerry does not sell unlocked carrier-neutral smartphones directly to developers and influencers is likely to cost it dearly in the market. It basically disqualifies it in places such as Silicon Valley. Very bad -- and totally unnecessary -- move. BlackBerry is trying to bypass the influencers and go straight for the masses. For a product like this, it has tended to be a failed strategy.

So what will happen to BlackBerry?

In brief, it will most likely be acquired. The mobile computing game is too big for the even bigger companies to allow BlackBerry to remain independent.

BlackBerry has many strong assets that several parties could exploit and integrate into their operations. For starters:

1. 75 million user base, including the valuable large enterprise users. Peanuts for Apple and Google, but material for Microsoft, Amazon, Nokia (NOK), HP (HPQ) and Samsung.

2. Patents and other intellectual property across several hardware and software technologies.

3. Server software that is proven, secure and cross-platform.

4. A leading automobile infotainment platform with QNX.

5. A strong operating system with what most people agree has a great user interface (BB 10).

2 of 3

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