There’s been an interesting rumor circulating around the internet in the last day regarding Blackberry’s next firmware update. Despite their efforts, Blackberry is still struggling to keep what tiny parcel of their former market remains, and their future is uncertain at best. The rumor is this, and simply this: Blackberry’s 10.2.1 update will include the Google Play Store. It doesn’t seem like much at first, but it has staggering implications for the company.
While we can think wishfully about enjoying a broad spectrum of no-hassle Android applications on the Blackberry devices, first we have to consider where this rumor is coming from.
To get an obvious but often missed point out of the way first, Blackberry devices can run Android apps already. There is a roundabout method of repackaging the standard Android .apk files to Blackberry’s .bar files. It is messy and inconvenient, but for the most part it works. Blackberry 10.2 is seen as the Android 4.2.2 runtime, so a large number of apps are supported in theory, but there are certain limitations. The obvious such as widgets and launchers are problematic, but some specifics such as face detection, multiplayer, NFC are also missing. Nevertheless, 10.2’s list of supported apps are quite impressive and often forgotten.
In addition to the fact that a native Play Store would be a logical progression, the rumors have really stemmed from a single source, a few pictures of a Z10 running what appears to be Google Play Store. The pictures themselves are hardly the most credible of sources, there seems to be a number of ways to achieve this same look, but the rumors are fueled by recent updates to Blackberry’s Android runtimes which have had a significant number of restrictions unlocked and also reportedly negotiations occurring between Google and Blackberry.
Blackberry’s struggle is quite obvious, they’ve had a declining market share for years and this year has been most dire. Instead of detailing what is already engrained clearly on everyone’s mind, I wanted to highlight the most recent development, and that is the management change that occurred at Blackberry.
Blackberry announced early August that it was “exploring strategic alternatives” which everyone took for “looking for a buyer”. Plenty of rumors floated around in the following months including big names such as Lenovo, Apple, Microsoft, SAP, etc. What did emerge was an offer from Fairfax to take the company private. No, it was not a big tech company that wanted to gut the company for its patents and technology, but someone who wanted to bet on the company’s future success and keep things running the way they were (sort of). The deadline for this offer was November 4th, and Blackberry shocked Wall Street when it announced something completely unexpected on November 4th. It would not accept Fairfax’s deal and instead would borrow $1 billion to continue operations. With this announcement was another shell-shocker, Thorsten Heins would be ousted as the CEO and replaced with John Chen, a veteran who has a history of turning around failed companies.
The stocks tanked afterwards, for good reason too. They were making a large gamble. Even today, we are getting more and more information about just what a large risk they took. It wasn’t just Fairfax who was interested in Blackberry. Initially reports that no one wanted Blackberry couldn’t have been further from the truth. Lots of people wanted to buy it or parts of it including Lenovo, Apple and Microsoft as well as individuals who figure they could be the next Steve Jobs. Their new approach shows either extreme optimism in the company’s future or naivete. I’m hoping it’s the former.
If you think about it quickly, the company turned down serious offers from big tech companies and the only offer that was was seen as likely was from Fairfax. They chose not to sell themselves in pieces to competitors (probably for more than the company’s current worth if done right) and instead wanted to take the company private to get out of public scrutiny, buy some time and reinvent themselves. What’s more shocking was what actually happened; borrowing $1 billion.
Prior to this, Blackberry was debt free. As much as people wanted Blackberry to go bankrupt, it’s simply unlikely without debt. They can be unprofitable, but as long as they have cash and no one to whom they owe money, no one can close down the company. By borrowing $1 billion, Blackberry has put a ticking time bomb in their office. They have scheduled interest payments and can go bankrupt. So why are they doing this? Blackberry has $2.5 billion in cash and now an additional $1 billion in debt. They are also in the process of getting a tax refund worth $500 million to $1 billion, giving them a total of $4 billion to work with, but they have seriously limited the time they have to work with. With $1 billion in debt, they cannot stall for 5 years then come up with something ground-breaking in a Fairfax situation, instead they need to act fast. This either signals extreme optimism or worrying naivete within the company.
The implications of what was described is simple. Blackberry is up to something. They have severely shortened the time frame they have to work with but armed themselves with as much cash as they can muster. They have turned down the last few lifelines tossed their way and are journeying into the unknown. Does Blackberry intend to take back the market? Or maybe just go out with a spectacular bang…
Personally I think that BB10 is a decent enough OS as it is, but there must have been a few more tidbits in development that warrant such optimism in the company’s future. When the rumors came out that Blackberry devices might be getting Play Store, that made sense. It isn’t going to be the rumored Playbook 2 that will save the company, it is going to be a compelling reason for Blackberry fans to return to their platform. Google Play Store addresses the biggest weakness of BB10, the lack of apps, and gives Blackberry an immediate jump ahead over the current 3rd place Windows. And more importantly, it will give BB10 a chance to be tried and tested rather than subjected to the whims of tech bloggers.
Will Google Play Store save Blackberry? I think it’ll be a game changer, but I’m hoping Blackberry has plenty more in store for us.