It has been learnt that the Canadian government stonewalled the efforts of the Chinese computer and mobile phone manufacturing company, Lenovo, to buy Blackberry Limited. The reason given for this was the security concern on part of government officials in the U.S. as well as Canada. Back in 2013, Blackberry Limited was up for sale, but not one of the large tech companies in the U.S. showed any keen interest in buying the firm. After the recent developments and changes brought about by Blackberry Limited CEO, John Chen, the company saw some profitability in the final quarter of 2014. Now, the cash-rich tech giants in the U.S., like Microsoft and Apple are obviously interested in acquiring the Waterloo, Ontario based company.
Other big mobile phone makers from China, like Xiaomi and Huawei, are also said to be interested in buying Blackberry Limited. However, the Canadians are again expected to keep these companies out of the bidding process. It must be known that Canada actually put a roadblock for Lenovo, in its efforts to buy Blackberry Limited in 2013 as well, on grounds of security issues. Lenovo was informed by the Canadian government that it would not allow the deal to go through, and will block any offer for Blackberry Limited from the company.
It is a known fact that the Canadian mobile phone manufacturer, Blackberry Limited, is nowhere near its peak at this point of time. The company, which used to be a trendsetter in mobile phone business around the world, has been surpassed by other global phone maker giants like Samsung and Apple Inc. long time ago. These companies have done so by being innovative and flexible in their approach, as well as introducing trendier devices at regular intervals. Blackberry failed to keep up with the trend as mobile phone users around the world moved towards smartphones based on Google’s Android, Apple’s iOS, and Microsoft’s Windows operating systems.
However, there is one aspect of mobile phone operating system that still belongs to Blackberry Limited, and is envied by other manufacturers. It is the secure servers, reliability, and the enterprise security features of Blackberry that still make it the first choice, and the common mobile device for government officials in Canada as well as the U.S. It is also known that the President of the United States, Barack Obama too, uses a Blackberry phone.
This means that the purchase of Blackberry Limited by any foreign company will be subjected to a great deal of scrutiny. It makes the process even more complicated if the company is based out of China, due to many reasons, including the distance. A company based out of U.S., like Microsoft or Apple, will be the preferred choice of governments of both countries, the U.S. and Canada. Agencies in the two North American neighbors would signal a green light for a buyer of Blackberry Limited, based close to home due to logistical ease.
In the meantime, Blackberry Limited announced another step in its next stage of the turnaround. This includes laying-off a large number of employees. This is the firm’s strategy to step up austerity measures. The cost-cutting has actually worked for the company, as it has brought big gains for its shareholders over the last one year. Major cost-cutting steps also make the company more attractive for firms interested in buying it, including Apple, and Microsoft.
Wells Fargo said in a report that the sale of the Canadian company in the near future looked less likely after a new share buyback was made. Analysts at Blackberry Limited said that they are looking at various strategic options like continuing the cost cutting, selling parts of the company, and aiming iOS and Android platforms. It is confirmed though, that any efforts made by Lenovo, or any other Chinese company, to buy Blackberry Limited, will be stonewalled by the Canadian authorities.
By Ankur Sinha
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