One of the most recognizable names in smartphones could be up for sale.
BlackBerry will form a special committee to review “strategic alternatives” including a potential sale of the company, the latest blow to the troubled smartphone maker.
In a statement released Monday, the committee will also weigh potential joint ventures and other partnerships in an effort to boost interest in its line of BlackBerry 10 devices.
“Given the importance and strength of our technology, and the evolving industry and competitive landscape, we believe that now is the right time to explore strategic alternatives,” says Timothy Dattels, chairman of BlackBerry’s special committee, in a statement.
Shares of BlackBerry are up 4.6% at $10.21 in mid-morning trading.
The move signals BlackBerry’s struggles to woo mobile consumers toward its BlackBerry 10 platform, featured on revamped smartphones including the Z10 with full touchscreen and the Q10 with the signature physical keyboard.
In June, BlackBerry reported 2.7 million smartphones running BlackBerry 10 shipped during their first quarter, about 40% of total BlackBerry devices shipped.
“It’s no surprise the status and future of BlackBerry has been up in the air for some time,” says Forrester’s Charles Golvin.
Once the dominant force in the smartphone market, BlackBerry quickly ceded ground to rivals like Apple, Google and Microsoft. According to research firm IDC, Google Android and Apple iOS are the top two mobile operating systems, while Microsoft’s rising Windows platform surpassed BlackBerry for third place.
“They had been waiting for the Z10 and Q10 to show some signs that the market was interested in an alternative,” says Gartner analyst Carolina Milanesi. “It seems the market does want that third ecosystem, but it’s not going to be BlackBerry.”
Despite its struggles, the company carries valuable assets to entice potential buyers, including its BlackBerry Messenger system and suite of enterprise software. “These are clearly valuable, but what’s unclear is whether they all hold value as a standalone entity or as pieces,” says Golvin.
JP Morgan Securities is serving as financial advisor to Blackberry and Skadden, Arps, Slate, Meagher & Flom are serving as legal advisors.
The company warned in its announcement that “there can be no assurance that this exploration process will result in any transaction.”
BlackBerry faces an uphill battle trying to catch mobile frontrunners Apple and Google, but IBB Consulting analyst Jefferson Wang says the company could still turn it around.
“BlackBerry has invented a market once before,” says Wang. “They’re going to have to do it again. They can’t be flat-footed on this next generation of mobile devices.”