My Thoughts on Technology and Jamaica: Blackberry being rescued by former co-CEO Mike Lazaridis - Fairfax Financial Holdings Limited is Fire and Blood as BBM goes free

Tuesday, October 15, 2013

Blackberry being rescued by former co-CEO Mike Lazaridis - Fairfax Financial Holdings Limited is Fire and Blood as BBM goes free

{5:25} And this [is] the writing that was written, MENE, MENE, TEKEL, UPHARSIN.   
{5:26}    This    [is]    the interpretation of the thing: MENE; God hath numbered thy
kingdom, and finished it.
{5:27} TEKEL; Thou art weighed in the balances, and art found wanting.
{5:28} PERES; Thy kingdom is divided, and given to the Medes and Persians.
{5:29} Then commanded Belshazzar, and they clothed Daniel with scarlet, and [put] a chain of gold about his neck, and made a proclamation concerning him, that he should be
the third ruler in the kingdom.

Daniel 5 vs 25 29. The King James Version

Blackberry was sold to Fairfax Financial Holdings Limited, for a very small value of US$4.7 billion dollars on Tuesday September 24, 2013 according to “Fairfax To Buy BlackBerry For US$4.7b”, published Tuesday September 24, 2013, The Jamaica Gleaner.

But the big surprise thus far is the fact that former co-CEO Mike Lazaridis has suddebly decided to make a rival bid to buy back his company as stated in the article “LAZARIDIS TO THE RESCUE? BLACKBERRY CO-FOUNDER CONSIDERS BID FOR COMPANY”, published October 11, 2013By Trevor Mogg, DigitalTrends. Looks like we have another Dell-like battle on our hands with a little Fire and Blood from House Targaryen, Game of Thrones Style!

Fairfax Financial Holdings Limited is currently the company's largest holder of private stock, roughly about 10%. This makes the shareholder of Fairfax Financial Holdings Limited, a Mr. Prem Watsa, officially the new owner of Blackberry. Sorta…..

This was a mere two (2) days after the weekend of Saturday September 21st 2013 and Sunday September 22nd 2013 that saw BBM ((Black Berry Messenger set free like a wild Horse into the Apple iOS and Google Android pasture as noted in my Geezam blog article entitled “Free Blackberry Messenger App coming to Android and iOS”.

In the process, Blackberry in its final death throes before it exploded, going supernova like a dying super massive Star, created the ultimate competitor to WhatsApp, the free BBM App that technically the first true Mobile Social Network as opined in my blog article entitled Blackberry launched free BBM App for Apple iPhone and Android smartphones - First true Mobile Social Network is Bob Marley Could You Be loved against WhatsApp”. That’s great news for lovers of the BBM Network as you can now be smart and popular!

This deal is only logical though; Fairfax Financial Holdings Limited has a 10% stake in Blackberry, making them the only game in town. In a statement to shareholders, Watsa put on a brave face, quote: “We believe this transaction will open an exciting new private chapter for BlackBerry its customers, carriers and employees. We can deliver immediate value to shareholders, while we continue the execution of a long-term strategy in a private company”.

He was a natural fit and a familiar face known and trusted by shareholders and investors interested in the company’s long term viability. Mr. Prem Watsa was quoted as saying in April 2013 that he’s a “big supporter” of the current CEO Thornstein Heinz - apparently in reference to all that Blackberry stock he owns.

This was mainly due to his promotion to Blackberry’s Board after BlackBerry founder Mike Lazaridis and co-CEO Jim Balsillie stepped aside in 2013. The deal for Fairfax Financial Holdings Limited to take over the reins of Blackberry becomes legit on Monday November 4th 2013.

But trouble is brewing as Fairfax Financial Holdings Limited only owns 10% of the company shares. They need to have at control of at least 50% or more to have controlling vote with Shareholder approval as well as to keep the company together and influence decisions at the Board level. Otherwise the other shareholders might group up together and decide it’s best to sell the company off in parts, in much the same way they’ve already let BBM go. After all in doing that, they’ve already made a new product altogether that a solid WhatsApp competitor!

Fairfax Financial Holdings Limited in Trouble – Don Quixote aka Mike Lazaridis to the Rescue

If former Blackberry CEO and founder of the original (Research in Motion) Mike Lazaridis tries to rescue Blackberry in partnership with fellow co-founder Douglas Fredin, he’ll basically do so with a command of only 8% of stock in Blackberry. He can get support from Venture Capitalists to assist him in wooing other shareholders to give him their support and buy back their shares as was the case with CEO Michael Dell as chronicled in my blog article entitled “Dell's Project Ophelia debuts at CES 2013 - Cloud Computing is the Bling Ring of Power to kick Dell into the Portable Computing Game”.

This would give the duo solid control over the company in the event of a competitive bid between himself and Mr. Prem Watsa led Fairfax Financial Holdings Limited. However, like the somewhat charismatic CEO and Founder Michael Dell, Blackberry CEO Mike Lazaridis also has to have a solid plan to get the company back on its feet again to be a success like CEO Michael Dell….muchless to even be Chairman of the Board!

For the record, CEO Michael Dell in partnership with Silver Lake Management LLC, has won against Blackstone Group and billionaire investor Carl Icahn, and has since re-aquired his company as stated in “Dell to invest more on PCs, tablets after $25 billion buyout win”, published Thu Sep 12, 2013 2:44pm EDT, By Poornima Gupta, Reuters as well as on their official Press Release “Michael Dell and Silver Lake privatization proposal accepted”. Michael Dell got overwhelming support from shareholders for his plan to invest more in Tablets and cutting Edge PC designs like Project Ophelia. More details on this in another blog article!

However, these trends all troubling. Despite the attachment all these people have to Blackberry, the fact that they are the only ones capable of rescuing a company that they themselves helped to destroy is worrisome. This was via their mis-interpretation of the Smartphone threat from the Apple iPhone back in 2007 which has now resulted in them losing Market share in key developing Markets like Latin American as stated in “BlackBerry admits hit by Android in key int'l Markets”, published Friday, October 04, 2013 by Julian Richardson, The Jamaica Observer

That current team, admittedly, finally led the eventual belated charge into the smartphone world nearly seven (7) years after the first Apple iPhone with their first true smartphone, the Blackberry Z10, Q10 and Q5 launch as chronicled in my blog article entitled “RIM rebrands as Blackberry and Launches Blackberry Z10 and Q10 - Alicia Keys' Global Creative Director is a Girl on Fire for these Tallawah yet Beautiful Creatures” and “Blackberry launched Budget Q5 at their Annual Blackberry Live Conference - Possible no Contract US$199  makes Q5 the Agents of S.H.I.E.L.D”.

The new Management is, unfortunately, unwaveringly similar to the previous one, vowing to continue on the rollout of more QNX OS based smartphones mainly focused on the Business Market. This is the same Market that’s abandoning them thanks to the trend of BYOD (Bring Your Own Device) which I’d long predicted in my Geezam blog article entitled “30% Blackberry Blackout by Corporate and Enterprise – Bring Your Favourite Gear”.

Blackberry’s History since 2012 – Similarities to Nortel Networks, another Canadian Giant

If you’ve read my blog article entitled “RIM filing for Chapter 11 Bankruptcy - The Last of the Mohicans Blackberry as Android Borne Supremacy Worldwide Continues, you’d know the past history of Blackberry that led to their cataclysmic demise up until 2012. Blackberry became the largest Canadian Telecom firm to go bust since Nortel Networks in 2009, which by the way used to be the Telecom Equipment Supplier to Cable and Wireless here in Jamaica.

I remember that like it was yesterday. Nortel Networks over-extended itself, focusing mainly on installing Telecoms equiptment and Training manuals. I got extensive Training at C&W (now LIME Jamaica) and I still have many of their Training Manuals with which I could teach Telecommunications! They lost out on lucrative maintenance contracts from many Telecoms Providers worldwide. Plagued by structural managerial problems, they failed to capitalize on maintenance contracts as a steady source of revenue.

They focused on Landline and PBX (Private Branch Exchange) equiptment instead of making equiptment for next Generation for 3G and 4G equiptment resulted in them losing lucrative contracts to Helsinki, Finland based Ericsson. They were skuppered and Nortel Networks was ripped apart.

Nortel Networks and its six thousand (6000) Nortel Networks Patents were sold off to a consortium of Apple, Microsoft, Sony and  - ironically - RIM in June of 2011 for some US$4.5 billion dollars as stated in Apple, RIM in group buying Nortel Patents for $4.5B”, published JUNE 30, 2011 11:09 PM PDT by Steven Musil, CNET News - Business Tech and “Nortel Patents sold for $4.5bn”, published Friday 1 July 2011 08.08 BST by Charles Arthur, The UK Guardian.

I remember that sale so clearly as Google had tried to aquire Nortel Networks for US$900 million only to lose out to the above consortium in both the US and Canadian Courts as stated in Nortel Patent sale gets court approval”, published JULY 11, 2011 11:51 AM PDT By Josh Lowensohn, CNET News - Apple Talk and “Nortel Patents draw bidding war: Apple vs. Google?”, published JUNE 16, 2011 10:03 AM PDT by Larry Dignan, CNET News - Business Tech.

Google then went on to buy Motorola Mobility for some US$12.5 billion, acquiring their patents and the company production plant as I’d speculated in my Geezam blog article entitled Google Acquires Motorola Mobility – Weapon of Choice in the IP and Set Top Box Wars”. My theory back then was that it was a plan to go into making Set Top Boxes for their Google TV.

But alas it was the other fear that the other Telecom Equiptmenr suppliers and handset makers had that materialized: Google did end up using Motorola Mobility to make a smartphone, the Google Nexus 5 as described in my blog article entitled “Google Nexus 5 running Google Android 4.4 possibly launching on Monday October 14 2013 - Google KitKat is the first Product Placement smartphone OS that'll Gimme me a Break”.

Just like Nortel Networks, Blackberry as we know it is no more. Since the passing of Nortel Networks into memory, Ericsson, to whom Telecom Provider LIME has outsourced all Maintenance Services as stated in my blog article entitled “LIME outsources Network Maintenance to Ericsson - The Lone Rangers in Telecoms may have to Tag Team to get a 700Mhz license for 4G LTE” has been superseded by Huawei Technologies from China.

Huawei is now the Top Gun in the Telecom Equiptment Provider world, mainly because they make very low cost cutting Edge 3G, 4G LTE (Long Term Evolution) and WiMaX (Worldwide Interoperability for Microwave Access) Solutions as reported in Who’s afraid of Huawei?”, published Aug 4th 2012, The Economist. not to mention low cost and fairly decent smartphones as stated in “You’ll never guess who was the big smartphone winner last quarter”, published Jan. 25, 2013 - 7:22 AM PST By Kevin C. Tofel, Gigaom.

Their Ascend Series is making waves since the Ascend 2, made its debut earlier in January 2013 at MWC (Mobile World Congress) as noted in my Geezam blog article entitled “Mobile World Congress 2013 in Barcelona announces Huawei Ascend P2 as Samsung debuts Tizen OS

All developments in the Telecoms World which I’m still tracking!

Blackberry’s similarity to Nortel Networks – CEO Lazaridis is no Steve Jobs  

Blackberry, the other Canadian giant, rose to prominence in 1999 and was undone in spectacular fashion over eight (8) years later by the ascent of one product: the Apple iPhone which Apple had launched in 2007. The Apple iPhone and all the Google Android copycats are the Knights that slew the Innovation dead Dragon that was Blackberry.

And what a spectacular fall from grace since 1999 according to Mike Walkley, an analyst with CanaccordGenuity. Their book value as of June 2008 stood at US$83 billion. Since then it’s been downhill all the way:

1.      Their stock value had plummeted from a high of US$140 to a mere US$9 per share.
2.      They lost 20% of their Market share in years that followed the debut of the Apple iPhone
3.      They are now a mere 1.5% of the Global Market and 4.8% of the US smartphone subscriber base according to the stats provided by in my blog article entitled Apple is Top Gun in smartphones Sales but Samsung generates the most Web Traffic - ComScore Stats for First Quarter of 2013 and StatCounter Stats for June 2012 to June 2013

In their last stroke of desperation in 2012, they began the process of shedding some five thousand (5000) employees globally. More heads are set to roll in 2013 as they have to get rid of an additional 4,500 to roll out of their 11,250 strong workforce, a 40% job cut for a company that’ll reduce them to a mere shadow of their former glory!

Blackberry Going Forward – What needs to be done sans Mike Lazaridis and Fairfax Financial Holdings Limited

In 2013, they also launched the Z10, Q10 and the budget Q5, but to no avail. Their actions proved to be too little too late in a Market already enamored with Apple iPhones and Google Android, now the Top 2 Smartphone Brands in the US as well as Mobile Operating Systems according to the stats provided by in my blog article entitled Apple is Top Gun in smartphones Sales but Samsung generates the most Web Traffic - ComScore Stats for First Quarter of 2013 and StatCounter Stats for June 2012 to June 2013”.

Android is now in its 9th iteration as Google KitKat as dutifully noted in my Geezam blog article entitled “Google Android 4.4 is now KitKat as Nestle-Google Secret Deal makes Android the first Product Placement OS”! And to those rooting for Google Android on Blackberry, the answer is a definitive no! Putting Android on a smartphone whose design is unappealing will not make it sell. Blackberry’s new Management will have to go back to the drawing board and come up wit as completely NEW design for Blackberry! Simple!

All predictions from my Geezam blog article entitled “Free Blackberry Messenger App coming to Android and iOS” coming to pass. Under the new Management, Blackberry will continue to make QNX Smartphone. Still, Blackberry’s off to a solid and secure start that needs to have Tablets as part of the strategy mix. Licensing the QNX OS to be used in other Consumer Electronics, Home Appliance and Automobile products would help them regain traction against security prone Google Android.

In my eyes and in the eyes of many, CEO Mike Lazaridis et al are not the persons Blackberry needs as their past track record thus far makes them the worst set of Managers to even contest re-acquiring and rescuing Blackberry. Like Dell’s shareholders, they can do better than these previous failed CEO’s.

Hopefully under the stewardship of a Management team chosen by shareholders that don’t involve either former CEO Mike Lazaridis or Fairfax Financial Holdings Limited, they’ll rise from the ashes like Daenerys Targaryan, Mother of Dragons in Fire and Blood!

But first they have to free the Unsullied and the Slaves and build and army of Dragons to  regain the Iron Throne in this Game of smartphone!

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