Archive | August 2013

6 reasons why Microsoft could buy BlackBerry

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One of the best ways for Microsoft to jump-start its lagging mobile business is to buy struggling BlackBerry. Why buy a mobile company quickly going south? There are plenty of reasons — here are the top six why Microsoft should pay up and take over BlackBerry.

Reason 1: Microsoft’s enterprise focus

Microsoft’s core business is in the enterprise — Windows, Office, servers and tools, Exchange, and more. BlackBerry’s core business is in the enterprise as well. But Microsoft has been hurt by the BYOD movement, because it allows iOS and Android devices to make their way into enterprises. BlackBerry is valued by enterprises for its secure networks and servers. The New York Times reports that “In its most recent quarterly report, BlackBerry reported having roughly 72 million users worldwide, most of whom were still generating monthly services fees by sending data over the company’s special closed network.” There’s clearly great synergy here for Microsoft.

Reason 2: increase market share

The latest figures from IDC show Windows Phone with a 3.7% worldwide market share, up from 3.1% a year ago. BlackBerry has 2.9% market share. Buying BlackBerry would give Microsoft a 6.6% market share. Given that it took Windows Phone a year to grow by only .6%, this would be a big increase. Over time, Microsoft would switch users from the BlackBerry to the Windows Phone platform, and grow Windows Phone that way, especially in enterprises.

Reason 3: hardware engineers

Steve Ballmer’s vision for Microsoft is to turn it into a devices-and-services company. Microsoft has not primarily been a hardware company up until now, and so it is not rich in hardware engineers. It takes a long time to recruit and hire them. Buying BlackBerry would immediately bring to Microsoft a sizable core of experienced mobile engineers and designers, who could work not just on smartphones but on other Microsoft devices.

Reason 4: increase intellectual property

The Times notes that “Analysts generally suggested that BlackBerry’s most attractive asset is its intellectual property, including some of its software and its various cellphone patents.” In today’s litigious tech world, patents can be used to harm competitors and get very serious licensing revenue from them. Microsoft uses its patent to extract licensing fees from many Android device makers. It’s not clear that BlackBerry has any patents that could be used in this way. But it’s certainly possible, and growing your patent war chest is always a good thing.

Reason 5: Smartcar strategy

One massive mobile market is currently up for grabs: Automobiles. There’s no doubt that all cars will soon become rolling networks and smart devices. No one dominates that market yet. Buying BlackBerry would give Microsoft a headstart on owning it. BlackBerry owns QNX Software Systems, which built the operating system that powers the BlackBerry 10. More important, though, is that the same operating system is being used by GE, Cisco, and notably General Motors. General Motors uses it for its OnStar service, as well as for its Audi and BMW lines.

The Times says that BlackBerry has plans to “use QNX’s automotive ties and its unique global data network to allow car companies to update vehicle software through wireless networks and to monitor vehicles’ mechanical state.” Microsoft could do that and go beyond it, looking to make Windows Phone or Windows the smartcar operating system.

Reason 6: cheapest cost

It’s clear that by itself, BlackBerry has no future. So the company can likely be bought at a bargain price, rather than at a premium. Microsoft is cash rich. It’s time to put that cash to good use, and BlackBerry would be a very good mobile investment at a reasonable cost.

13Q2 Smartphone: 80% on Android

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Despite beating Wall Street expectations in terms of shipment volumes, Apple’s share in the worldwide smartphone operating system market posted a year-over-year decline during the second quarter of 2013 (2Q13). Meanwhile, Android and Windows Phone both managed slight increases during the same period. According to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, vendors shipped a total of 236.4 million smartphones in 2Q13, up 51.3% from the 156.2 million units shipped in 2Q12. Second quarter shipments grew 9.3% when compared to the 216.3 million units shipped in 1Q13.

Smartphone OS Highlights

Android maintained its leadership position, with strong contributions from Samsung and its Galaxy S4. Not to be overlooked were LG and Chinese vendors Huawei, Lenovo, and ZTE, which each recorded double-digit shipment volumes in the millions. Combined, these vendors accounted for 62.5% of all Android-powered smartphone shipments during the quarter. Still, the remaining vendors within the Android ecosystem should not be overlooked, as many have developed a strong local presence within key developing markets.

iOS finished the quarter as the clear number 2 operating system, showing that, even without new product launches, demand remains strong. Moreover, Apple added new mobile operators to its camp, boosting short-term volumes and cementing long-term end-user relationships. What remains to be seen is how the new iOS 7 will be received once it reaches the market later this year, as much of the look and feel of the user interface has been revamped.

Windows Phone posted the largest year-over-year increase among the top five smartphone platforms, and in the process reinforced its position as the number 3 smartphone operating system. Driving this result was Nokia, which released two new smartphones and grew its presence at multiple mobile operators. But beyond Nokia, Windows Phone remained a secondary option for other vendors, many of which have concentrated on Android. By comparison, Nokia accounted for 81.6% of all Windows Phone smartphone shipments during 2Q13.

Q2 2013 OS SMARTPHONE