Exclusive: Cisco, Google, SAP discussing BlackBerry bids - sources
(Reuters) - BlackBerry Ltd, on the block as its smartphone business struggles, is in talks with Cisco Systems, Google Inc and SAP about selling them all or parts of itself, several sources close to the matter said.
Context & Ripple Effects
BlackBerry has been telegraphing distress for well over a year: it quietly hired a law firm to work on restructuring back in April 2012 (restructuring prep), then made the search explicit in August 2013 when it said it was looking for a buyer. On September 25 it canceled its quarterly results call outright — a step distressed companies take when they don't want numbers out mid-negotiation.
What changed this week is specificity: sources tell Reuters that Cisco Systems, Google and SAP are discussing bids for all or parts of the company. The claim is still unconfirmed, but eight outlets including Mashable and The Register picked it up the same day, and the bidder mix matters — these are enterprise-software and platform companies, not handset rivals, which suggests the interest is in pieces of BlackBerry rather than its struggling phone business.
First-order effects
- BlackBerry's board moves from a single-track 'find a buyer' process to weighing break-up offers, with Cisco, Google and SAP each able to cherry-pick assets — enterprise services, patents, or the device arm — instead of taking the whole company.
- Any deal at a price reflecting the phone business's decline would force BlackBerry shareholders to accept that the handsets are worth little beyond their installed base, while the canceled earnings call keeps financials opaque until a transaction is struck.
Second-order effects
- A carve-up puts BlackBerry's large patent portfolio in play at distressed pricing — a magnet for companies like Google, which has spent years and hundreds of millions fighting patent trolls and has every incentive to see such portfolios land with operating companies rather than assertion shops.
- Enterprise mobility vendors who bid nothing must now plan around a competitor owning BlackBerry's security and device-management franchise: if SAP or Cisco takes the enterprise piece, their own mobile-workforce offerings face an incumbent with new backing.
Third-order effects
- The pattern here points toward distressed hardware brands being dismembered by software and cloud buyers — device businesses sold or shut down while patents and enterprise software lines get absorbed, decoupling brand value from manufacturing.
- If platform companies keep acquiring security and device-management assets this way, corporate mobile infrastructure consolidates around a handful of US enterprise vendors, shrinking the space for independent handset-linked software suppliers.
The trend: Mobile hardware value is migrating to software and services owners, with struggling device makers increasingly broken up and absorbed by enterprise-platform companies rather than rescued whole.