Why Is Lenovo So Desperate To Acquire BlackBerry (BBRY)?


The marriage between BlackBerry and Lenovo seems quite ethical this time. Yesterday, another Lenovo ‘s executive has hinted that the company has opened the door to acquire the beleaguered Canadian smartphone company. Talking with the French Financial paper Les Echos, Lenovo’s Chief executive—Yang Yuanging—told in statement that the deal between both the companies could make sense in future.

The Executive said, “As for BlackBerry, the file could possibly make sense. But first I have to analyze the market well and understand what is the exact weight of this company.” (as translated via Google Translation)

In January this year, a Lenovo chief financial officer–Wong Wai Ming–told Bloomberg that the company was looking to extend its mobile presence across the world, which also includes the acquisition or licensing of BB10 OS. The Chinese vendor (Lenovo) is well-known for its line of desktop and notebook computers, besides, the company has proven itself as one of the potent smartphone vendors in its domestic market; the company succeeded to grab second position in terms of smartphone shipments in Q3 2012. This time, Lenovo’s aggressiveness towards acquisition of BlackBerry (BBRY) is depicting how much conscious it’s about mobile business.

Lenovo Would Try To Acquire BlackBerry

Yesterday, BlackBerry’s stock price jumped up 14%, closing at $14.90, following the chatter related to Lenovo’s CEO’s statement. Currently, the Canadian company is betting the entire company on the success of its new BlackBerry Z10 smartphone to standalone its mobile business across the world. However, the sales of the Z10 haven’t been as much impressive as it was expected earlier, and it’s tough to predict whether the company’s latest device could rescue the company or not.

We have already discussed that BlackBerry’s CEO–Thorsten Heins–wouldn’t in the favor to sell out the company–neither hardware division nor software. But, he had kept an option open for hardware vendors for licensing of BB 10 OS.  Lenovo has currently the popular ThinkPad PC business, and it could potentially capitalize these two friendly businesses. This time, Lenovo is selling Android smartphones, which are mostly China and Asian countries-specific. If the Chinese PC vendor succeeds to acquire BlackBerry, then it would have opportunity to clinch a big chunk of global smartphone market share.


BlackBerry Lenovo

Does Lenovo’s decision make any sense? However, we shouldn’t consider Lenovo’s CEO’s decision as the company’s official stance; it might be the executive’s own perception. Of course, Lenovo will saddle its all efforts to persuade BlackBerry, because the company could understand the importance of the brand value, especially with BlackBerry, which has created stronghold among corporate users.

BBM On Android Devices

If Lenovo succeeds to purchase BlackBerry, then definitely, it would be a great hearsay for consumers as well. Undoubtedly, with BlackBerry, the Chinese smartphone vendor could attract a significant number of businesses and professionals, those are quite conscious with security issues.

Apparently, it would be interesting to see integrated BlackBerry services on Lenovo’s Android-powered smartphones. Indeed, it would be impeccable to talk with BBM friends on Android devices, and even playing through BBM Money, which has recently been launched by the Canadian smartphone maker. Over past few months, BlackBerry has been endeavoring to build up a strong mobile ecosystem. Which can be understood with the availability of 70,000 mobile apps for BlackBerry Z10 till its launch.

BlackBerry Doesn’t Want To Launch Smartphones At $50-60 ?

BlackBerry’s CEO has recently reported Bloomberg that company hasn’t any plan to get into $50-60 smartphone market segment. Besides, it’s also tough for many to believe  BlackBerry would get into the $100-$200 price segment, as the competition is quite high in this segment. Despite, a considerable number of BlackBerry enthusiasts want that the company should launch its high-end smartphones at the price tags ranging $200-250.

However, over past few months, Blackberry’ subscribers base grew in some markets like Nigeria, the Philippines, South Africa,  and Indonesia, which helps the company to offset its losing grip on markets like North America and Europe. In addition, the BlackBerry’s sub growth has also declined in Africa and Asia due to intense competition offered by Samsung and other local vendors such as Spice and Micromax. Despite, people still don’t expect much from the company, especially to produce a smartphone that is cheaper than smartphones those are offered by local vendors. But, it should intend to get into the price segment where smartphone volume growth is now exploding.

In Q4 2012, Lenovo succeeded to push itself among top five smartphone vendors with 4.4% global smartphone market share; shipped 9.5 million smartphone during the quarter. On the other side, global smartphone market share of BlackBerry declined to its all time low during the last quarter, reached to 3.5%. What are you thinking right now? Are you still believing that Lenovo shouldn’t try to persuade BlackBerry?

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