Silver Lake Partners, the private equity group steering PC giant Dell to a US$25 billion retreat from the stockmarket, may be trying to add smartphone maker BlackBerry to the portfolio to create a corporate computing powerhouse.
Executives from BlackBerry recently met with Silver Lake to discuss “potential collaboration” in enterprise computing, according to Reuters, which also said BlackBerry’s board was “increasingly coming around to the idea” that a private buyout would give the Canadian mobile group time to fix its problems away from the demands of the stock market.
Exactly the same rationale — of working in freedom from the market’s quarterly demands for profit — has been used by founder Michael Dell to justify the buyout of Dell Inc, which has been delayed due to rows over voting. A new vote will be held on Sept. 12.
A combination could solve the two companies’ separate problems at a stroke — remedying Dell’s lack of any significant smartphone or tablet offering, and possibly helping overcome BlackBerry’s dwindling consumer base and continued losses.
It could also fill a gap for large businesses which need a single vendor for secure smartphones and PCs, one analyst has suggested.
Dell is struggling to cope as the PC market on which it made its name shrinks. In May it reported quarterly profits down 79 percent to US$130 million, with revenues down 2 percent to US$14 billion.
BlackBerry’s shares have fallen by more than 19 percent this year alone.
According to the Reuters report, one source said there was “a change of tone on the board” at BlackBerry. The company has lost US$212 million over the past year and dropped out of the world’s top five smartphone suppliers. Its short-term cash pile has remained at around US$1.5 billion.
Combining the two could produce benefits, but could it work?
Benedict Evans, technology and telecoms analyst at Enders Analysis, said: “I’m not sure how being owned by Dell solves BlackBerry’s problems. What does that combination do that isn’t still challenged by the business environment?”
However, he added that there was still a crucial gap in the enterprise market.
“Dell has backed out of mobile because there isn’t scope for it to be in the smartphone and tablet market. But if together they can find the right corporate story — which neither has yet — it could work,” he said.
Asked about the reports of meetings with Silver Lake, a BlackBerry spokesperson said it “does not comment on rumor and speculation.”