As Microsoft (MSFT) buys Nokia's cellphone business for $7 billion, it could further pressure BlackBerry (BBRY) to find a buyer amid growing competition from Windows Phone 8 and Nokia Lumia smartphones.

The VAR Guy

September 3, 2013

1 Min Read
Microsoft-Nokia Deal Pressures BlackBerry (BBRY) Exit Plan

Microsoft’s (MSFT) $7 billion buyout of Nokia’s cellphone business could further pressure BlackBerry (BBRY), which increasingly looks like a fading player in the smartphone business. Indeed, if the Microsoft-Nokia deal receives regulatory approval, it will cement exiting CEO Steve Ballmer’s devices plus services strategy and potentially intimidate potential suitors for BlackBerry, The VAR Guy believes.

Think of it this way…

  • Google Android and Apple iOS dominate the mobile operating system market across tablets and smartphones.

  • BlackBerry has been fading and is up for sale. There’s also chatter about a potential BlackBerry Messenger (BBM) spin-off.

  • Microsoft has struggled with the Windows mobile strategy. Surface RT tablets got off to a terrible start, Surface Pro looks reasonably promising for the long haul, and Windows phones have been a mixed bag.

  • But the Nokia Lumia 1020, featuring Windows Phone 8 and a 41 megapixel digital camera, is off to a promising start.

Reality Check

Amid all those variables, it’s easier to see Microsoft-Nokia — rather than BlackBerry — as a solid No. 3 market player vs. iOS and Android. Further complicating matters for BlackBerry: Will the proposed Microsoft-Nokia scare off potential BlackBarry suitors that don’t want to compete against such deep pocketed rivals?

Still, The VAR Guy’s reasoning could be off base. BlackBerry shares are up about 2 percent today (Sept. 3, 2013) in early morning trading. Wall Street’s thesis: If Nokia can find a buyer, perhaps BlackBerry can, too.

The VAR Guy thinks that’s flawed logic. Microsoft is buying Nokia because Nokia is deeply committed to Windows 8 smartphones and still has a massive customer base. BlackBerry lacks that type of rich uncle as a potential buyer…

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