BlackBerry has agreed in principle to be bought by a consortium led by Fairfax Financial for $4.7bn (£3bn), but according to one telecoms expert the once dominant smartphone company will axe all manufacturing of devices by the middle of next year.
Jan Dawson, chief telecoms analyst at Ovum, argues that taking BlackBerry private does not solve the fundamental problems at a company where device sales are "cratering".
According to Dawson, the BlackBerry announcement last week that it no longer intends to pursue the consumer market is essentially the "death knell" for this business. "BlackBerry's supply chain relies on scale for profitability, and it will never again be able to achieve the scale necessary to make money on devices. It's likely that BlackBerry will be out of the device business entirely by the middle of next year," he predicted.
He added that BlackBerry's other businesses are all to a greater or lesser extent dependent on its devices business, such as BlackBerry Messenger and its mobile device management business.
Dawson argued that the only part of BlackBerry that looks to be worth a significant amount at this point is its patent portfolio, and that, he believes, certainly would not justify the purchase price on its own.
"Normally, companies are taken private in order to give a long-term strategy time to payoff without the hassles of short-term investor scrutiny. But BlackBerry's key problem for the last couple of years has been the lack of such a long-term strategy. It simply hasn't articulated a way to rebuild its business as its device sales drop precipitously," Dawson added.
"Unless Fairfax plans to radically change or accelerate BlackBerry's strategy, it's unlikely to be able to turn the company around. And that means we're likely seeing the beginning of the end for one of the most iconic brands in mobile technology."
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