NEW YORK (TheStreet) -- I still remember that day close to the year 2000 market top when I wasfirst outfitted with a BlackBerry. It was a very liberatingexperience. I was no longer tethered to my desk for late officedinners, and traveling wasn't equivalent to being in dark territory.
(the company then called Research in Motion) transitioned to GSM (Global System for Mobile) and the email-only devicebecame a phone. Color, apps and touchscreen followed, but some thingstook too long. The dramatic lead BlackBerry built up until 2007rapidly started crashing down in 2009 and 2010.
In record time, Android has now grown to 70% market share, iOS 21%,and
and BlackBerry now share part of the remaining 9% of themarket. It's last call for BlackBerry. How will this end?
I think I know how. But before I tell you, there are two keyobservations I have made
that are necessary to repeat and expand upon now:
1. Why on Earth did BlackBerry launch a non-keyboard device first?
I have yet to hear of anyone waiting for a non-keyboard BlackBerry.If you were willing to sacrifice a keyboard in your smartphoneexperience, you most likely switched to iPhone, Android or WindowsPhone a long time ago already.
If you are wondering why the reception to the non-keyboard BlackBerryis a bit lukewarm, you shouldn't. It really shouldn't take a rocketscientist to figure this out.
One wonders if BlackBerry does any market research. If it had doneany, and the market research weren't fake or otherwise deliberatelyfalsified by some lazy pollster, the company would know what the rest of usknow: 99% of BlackBerry users remain on the platform for one simplereason, the keyboard.
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BlackBerry will never be remembered for the non-keyboard version. Thekeyboard version should be available in the U.S. by July or August, andit had better be good -- 75 million users are waiting for it. Incontrast, I can't think of 75 thousand people waiting for thenon-keyboard version.
2. BlackBerry can't break into the market using the traditionalcarrier-contract model.
There are some people, especially among developers and otheradventurous influencers in places such as Silicon Valley, who would beinterested in giving the all-new BB 10 platform a try. They would dothis without getting rid of their existing Android or iPhone device --either because they swap SIM cards with high frequency, or becausethey carry multiple devices simultaneously anyway.
These developers and influencers don't buy smartphones from operators,let alone enter into operator contracts. They buy unlocked iPhonesfor $649 and up directly from
and Nexus devices for $299 andup directly from
. They don't want to be tied to any onecarrier as they frequently swap SIM cards.
These people will not buy a carrier-branded smartphone, and theycertainly won't do so if it means entering into a two-year contract. Asit stands, this will keep them from buying a BlackBerry 10 deviceuntil BlackBerry starts offering these devices directly, free fromcarrier influence, SIM locking and without any contract.
is now taking a positive step in this direction, butit's not the same as BlackBerry itself offering BB 10 devices forcash, unlocked and carrier-neutral in every way.
Why doesn't BlackBerry sell to these developers and influencersdirectly from its Web site, or even from
?Certainly the carriers should not feel threatened by this becausethese people will be using their network services anyway, just on apre-paid SIM card basis.
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The fact that BlackBerry does not sell unlocked carrier-neutralsmartphones directly to developers and influencers is likely to costit dearly in the market. It basically disqualifies it in places suchas Silicon Valley. Very bad -- and totally unnecessary -- move.BlackBerry is trying to bypass the influencers and go straight for themasses. For a product like this, it has tended to be a failedstrategy.
So what will happen to BlackBerry?
In brief, it will most likely be acquired. The mobile computing gameis too big for the even bigger companies to allow BlackBerry to remainindependent.
BlackBerry has many strong assets that several parties could exploitand integrate into their operations. For starters:
75 million user base, including the valuable large enterpriseusers. Peanuts for Apple and Google, but material for Microsoft,Amazon,
Patents and other intellectual property across several hardwareand software technologies.
Server software that is proven, secure and cross-platform.
A leading automobile infotainment platform with QNX.
A strong operating system with what most people agree has a greatuser interface (BB 10).
Meanwhile, many companies are looking for any remaining empty chairaround the table to beef up their positions in this very big game. Inmy opinion, the five most likely acquirers for BlackBerry are these:
With a similar incremental market share to BlackBerry, this is "lastcall" for Microsoft, too. By consolidating the #3 and #4 player,Microsoft might have a shot at reaching 10% of the market, makinglong-term survival at least plausible. Microsoft would have aparticular interest in the server software, operating system, and theQNX automobile business.
Nokia might perhaps not be able to acquire RIM alone. Perhaps itwould have to split the purchase with Microsoft. Nokia takes thehandset business and Microsoft takes the server and automobilebusiness. If Microsoft could lend
$2 billion to go private,surely it could contribute a decimal point to secure itself the #3spot in mobile computing.
I don't see how you can stay in the consumer and enterprise PCbusiness without also being in the handset business. It's oneinfinite shade of gray worth of a computing continuum. HP could"build its own" based on Android and Windows. However, if it wants tochart its own course, the only operating system that it couldreasonably buy, that has market share, is BlackBerry. It also doesnot preclude HP from also doing Android and Windows -- and Chrome OS-- side by side with BlackBerry.
Today dependent mostly on Android, it is planning to diversify intoTizen. However, this diversification may fail, and it's even morelikely to fail in the U.S. than in emerging markets. AcquiringBlackBerry would bring Samsung one step closer to reducing itsdependence on Android.
Somewhat like Samsung, Amazon is dependent on Android. For a simplebook reader, this may not matter as much, but once this device ismeant to compete as a handheld computer, forking Android becomes ahuge challenge. It would be natural for Amazon to have an interest inBlackBerry's market position and technology.
Who will NOT acquire BlackBerry? I see only two: Apple and Google.They simply wouldn't get away with it for anti-trust reasons. Both ofthese companies have to tread lightly, and BlackBerry isn't worth itfor them given their size and resources.
In the end, BlackBerry is simply too attractive to be left alone. Oneof these five players is likely to acquire it, in my opinion.
At the time of publication the author was long GOOG andAAPL and short MSFT.
This article was written by an independent contributor, separate from TheStreet's regular news coverage.
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