The BlackBerry Q10, new smartphone model from the Canadian company, launched in May.
A member of the committee to explore strategic alternatives for the BlackBerry Ltd. said she should sell certain assets and compete as a “niche company” in global smartphone business.
In an interview with The Wall Street Journal in Stockholm, Bert Nordberg, newly elected member of the board of directors of BlackBerry, said there are “subsets of assets which the company can get rid of” to survive.
This was the first interview by a board member of the BlackBerry since its strategic review was announced in early August.
Nordberg, former CEO of phone maker Sony Ericsson has not ruled out a total sale or a strategic partnership, and gave no details on which “subsets” of assets could be sold. However, he said the board is aware of the value created by the company in areas such as customer service corporate, hardware functionality and secure communication.
“I believe that the BlackBerry will be able to survive as a niche company,” Nordberg said. But the executive warned that being a niche company means deciding that this is their business model. “Historically, the BlackBerry has always had bigger ambitions. But fighting giants like Apple, Google and Samsung is hard.”
Nordberg said that BlackBerry needs to deal with the huge difference between how much it is worth on paper and how Wall Street interprets the value of the company.
“If you look at the book value of the BlackBerry against its market value, it is clear that much work remains to be done,” said Nordberg.
BlackBerry was a pioneer in the first phase of the smartphone market, but succumbed to competition from rivals such as Apple Inc. and Samsung and collapsed in recent years, with its market share falling apart and actions. A big bet made by the company on a new operating system and several new phone models launched earlier this year did not produce the expected results.
After months of speculation about his future, the company announced in August the formation of a special committee of the board to explore strategic options, including explicitly the first time the possibility of a sale.
Nordberg, a Swede of 57 years old, joined the board of the BlackBerry in February this year, along with Richard Lynch, an executive retired American Verizon phone. Despite being new members, they were chosen to serve on the special committee of five which is headed by Timothy Dattels, a former executive at Goldman Sachs.
I think the choice “has to do with my recent experience with the sale of the stake in Sony Ericsson to Sony Ericsson,” said Nordberg.
BlackBerry hired JP Morgan to help her in the strategic review, which will assess the value of various assets of the company.
“The BlackBerry has unique assets that makes it stand out among other mobile phone makers,” said Nordberg. “The BlackBerry is strong in service to companies, their products are proof of the NSA (the security agency of the U.S. government), so you can not intercept the communication of it, the keyboards of their phones have many fans around the world and the company has a data network that is a world leader. “
Nordberg says that despite having attended only three board meetings so far, he and the special committee communicate weekly. He believes that his view on the state of the BlackBerry is shared by the rest of the board.
Nordberg had a crucial role in the massive effort to restructure the Swedish manufacturer Ericsson telecommunication networks, when the company came to the brink of bankruptcy in the early 2000s. Ericsson has cut almost 60,000 jobs, reducing the number of employees by more than half.
Later, as CEO of phone maker Sony Ericsson, Nordberg eliminated the company’s presence in the market for basic phones and low cost business focused only on smartphones with Android operating system from Google Inc.
“As CEO of Sony Ericsson, bet on Android was an easy decision,” he said. “With the BlackBerry, the situation is definitely much harder. Structure of BlackBerry security is embedded in mobile software, so you can not just decide to change the operating system.”
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