Mon September 23, 2013
BlackBerry Agrees To Sell Itself For $4.7 Billion
Originally published on Mon September 23, 2013 6:38 pm
MELISSA BLOCK, HOST:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
ROBERT SIEGEL, HOST:
I'm Robert Siegel, and it's time now for All Tech Considered.
BlackBerry, the maker of the once iconic smartphone, may have reached the end of the line as an independent company. It announced last week it was writing off close to a billion dollars this quarter and laying off 40 percent or its remaining workforce. And this afternoon, BlackBerry's board of directors announced that it had reached a preliminary deal to sell the company to Fairfax Financial Holdings, BlackBerry's largest shareholder.
NPR's Steve Henn joins us now. And, Steve, what more can you tell us about this potential buyer and what a sale would mean for BlackBerry?
STEVE HENN, BYLINE: Well, Fairfax Financial Holdings is a large Canadian investment house. It has more than $30 billion in assets and billions in annual revenue. So that fact that it's buying up the rest of BlackBerry that it doesn't already own should give BlackBerry a bit of a financial lifeline while the company tries to figure out its next steps.
Now, this deal isn't finalized. Fairfax Financial is still doing due diligence and lining up financing. But I think it's safe to say that the days of BlackBerry as the maker of a mass-produced, consumer-oriented smartphone are likely drawing to a close. As you said in the intro, the company had nearly a billion dollars in losses this last quarter, and those losses stem from the fact that it just wasn't selling very many phones. BlackBerry sold just 3.7 million phones in the last three months. Most of those were its older models, so its new phones were languishing unsold and largely had to be written off.
SIEGEL: Yeah. There's a remarkable comparison. Apple sold 9 million new iPhones over the weekend, which means that Apple sold two to three times more phones or as many phones in the past two days than BlackBerry sold in the past three months.
HENN: Yeah, that's right. And it really is incredible. You know, BlackBerry tried to introduce a new line of phones this year, of smartphones, that didn't have the company's famous keyboard that used a touch interface. They've been trying to make their phones more fun, less oriented to work. But commercially, they've really just failed.
And what's even more remarkable about all of this is that when the iPhone was introduced in 2007, almost no one expected it to dethrone the BlackBerry. Remember in the election in 2008, BlackBerry still had a certain cultural cachet. President Obama, then a candidate, signaled to the world that he was hip or at least, you know, well-connected by using a BlackBerry and talking about his BlackBerry addiction.
SIEGEL: Yeah. People spoke of their CrackBerrys at that time. This was a remarkably popular consumer device pretty recently. How do you think these little smartphones changed the way we live, Steve?
HENN: Well, in some ways, I think BlackBerry was a canary in the coal mine and the, you know, the early CrackBerry addicts may have given us a glimpse at our collective technological future. When these devices first came out, they weren't adopted by everyone. BlackBerry first gained a following with bankers and lawyers and Wall Street and then Washington. You know, so they were used by type-A personalities who couldn't seem to leave their work behind or put their device down.
I spoke to my editor at NPR about when our organization made the switch from pagers, and he said at first when he got a BlackBerry, it felt like this great new toy, but quickly he grew to have sort of a love-hate relationship with it because it meant that work followed him everywhere. And that's really the thing about these devices. When you have one, it's great because you can answer your email at a kid's soccer game. But soon people expect that. And it becomes impossible to disconnect.
As Apple and Android have brought smartphones into the lives of millions of, you know, ginger high school students, that inability to disconnect, the compulsive texting has infected you know, broad swaths of our culture. I saw recently that the average American spends 2 1/2 hours on their smartphone each day, and whether we'd like to think of BlackBerry as part of that phenomenon now, it really helped create it.
SIEGEL: Thank you. That's NPR's Steve Henn. Thanks, Steve.
HENN: My pleasure. Transcript provided by NPR, Copyright NPR.