BlackBerry: How the Mighty Have Fallen

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Sept. 20 (Bloomberg) –- Bloomberg’s Cory Johnson, Jon Erlichman and Hugo Miller discuss BlackBerry’s cutting 4,500 jobs and recording an inventory writedown of as much as $960 million. They speak with Pimm Fox on Bloomberg Television’s “Taking Stock.” (Source: Bloomberg)

Apple is out there, you have got blackberry unable to come anywhere near that.

It is a disastrous preannouncement for the company.

Going from sales of $3 billion to $1.6 billion.

Is this a national tragedy for the canadian technology industry, hugo miller?

I don't know if people are going to be wearing black armbands tomorrow, but there are a lot of people thinking that obituary should start to be written out.

It is sad to see.

The company was in such heights just five years ago.

That is the story of technology.

Even the optimists now are not holding out a lot of hope that blackberry can make a turnaround.

Jon erlichman, was this a failure of technology, of marketing?

What caused people to move away from blackberry?

I think this was a timing thing.

This was a company that -- they were making their phones more dynamic and more interesting.

Their sales were climbing in emerging markets, and maybe they didn't have to worry about what is happening in the u.s. as a result, it took them a long time.

There were hiccups along the way to get the phones to market that they wanted.

By the time they had them on the market, the market left them behind.

Is there any hope for the company, cory johnson?

They don't seem to be trying.

That's not their plan.

Their plan is to sell this business and let somebody else figure it out.

They do have some assets, right?

They have a lot of patents and a lot of cash.

$3 billion in cash.

A market cap of close to $6 billion.

What the value of those patents are, it is in the eye of the beholder.

There are people who like to use that little keyboard.

I had breakfast this morning with a guy who was talking very specifically about, i know it is a dying brand, but i really like this device.

You see how fast the turn comes.

When they announced they were for sale, enterprise customers turned the other way.

Can you imagine being in a sales meeting when you are the i.t. manager of a big company, and you are about to sign a new deal for thousands of blackberries, and the company announces that it is for sale?

Hugo miller?

I think that is something that business case studies will focus on for years to come, how and why they decided that just when they are starting to get these phones into channels, get businesses and consumers excited, they put a for-sale sign on the lawn.

That will be a strategic mistake, whether they are bought or broken up or somehow limp along as a smaller company focused on software and networks.

D anytime you see a company up for sale, this is one of the things that made me crazy.

I would see a company with an announcement, we are looking for strategic alternatives.

The stock would go up.

When you are announcing it, you have gone through every avenue to sell the company.

Usually it is a bad sign, and people should take note.

Jon erlichman, are there other companies that will be hurt by this?

There are chip manufacturers, a supply chain involved.

That's a great point, pimm.

It has been just as important for other companies to try to figure out where the positioning is going to be in the smart phone wars as it is for a company like blackberry.

You hear the story all the time.

We talk about intel on "bloomberg west" all the time.

It is a game of chess pieces.

You are betting on certain players to do well.

In the case of blackberry, we have known for a while that their big chance was going to be with this of phones which were delayed, and now were out on the market.

A few months into the process, they said we are up for sale.

That billion dollar write- down is all about that z-10. they made a ton of them, and they are writing down $1 billion worth.

That was a shocking admission to me, that he was the z-10. hugo miller, are there any potential bidders for the blackberry business you can identify?

Bloomberg has reported that bankers have looked for close to a year and found no real interest in buyers.

We know that fairfax financial has been quietly reaching out to the canadian pension funds.

These are big pension funds.

They are not finding any interested buyers among those pension funds.

They don't want to take on the risk of an investment like blackberry.

The company is in a tricky situation.

They put a for-sale sign on the lawn.

For all we know, there are no serious buyers as of now.

Sales continue to fall.

They are looking for someone.

They did sell nearly 6 million phones in the second quarter.

Where do those sales go now, to apple?

Two microsoft/nokia?

Two android -- to microsoft/nokia?

To android?

That's how many they shipped.

You have to get to the hard numbers of what they sold.

That business is moving to other companies, to samsung and apple.

It has not yet moved to nokia and windows.

What this shows is how dramatically things can change in technology.

Investors tend to reward technology stocks with really high multiples, because they see the future of growth.

The future does not always work out as planned.

No.

do you think we will be wondering what a keyboard is in five years?

The kids won't even know about dial-up phones.

Thank you very much.

Thanks also to jon erlichman,

This text has been automatically generated. It may not be 100% accurate.

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