BlackBerry needs partners, analyst says

BlackBerry needs to either sell off its hardware manufacturing business or partner-up with a competitor before its too late, according to a U.S.-based financial analyst, as the Waterloo-based smartphone maker continues to lose ground in an increasingly competitive global smartphone market.

New numbers released yesterday by the International Data Corporation show BlackBerry, which once dominated the global smartphone market, has now fallen to fourth place, behind rivals Android, Apple and Microsoft.

It means the Canadian smartphone maker must change its business model in order to adapt to a changing marketplace and, according to one analyst, BlackBerry can no longer do it alone.

"They need partners," Peter Misek, managing director of technology research at global banking investment firm Jefferies, told The Morning Edition host Craig Norris Thursday.

"The hardware side has become massively commoditized with Android given away for free is being used literally by dozens of Chinese and Indian manufacturers with products sold with virtually no margins."

"On the hardware side, if they dont partner up quickly or sell that business, it might be too late for it," he said.

Restructuring began in July

BlackBerry began its restructuring efforts in July, when the company laid-off 250 employees at its Waterloo-based product testing facility.

A number of top executives also left the company, starting with Playbook executive David Smith, whos departure came on the heels of the mass layoff.

Smiths exit was followed by the exodus of three more senior managers including, Doug Kozak, vice-president of corporate technology information, Carmine Arabia, vice-president of global manufacturing and supply chain and Graeme Whittington, vice-president of service operations.

Peter Misek said that BlackBerry was hoping its Z10 handset would have sold better than it did and now the company is trying to bring its costs in line with lower than expected revenue.

BlackBerry not 'going to hope and pray'

"Theyre not going to hope and pray these revenues materialize, theyre actually going to bring the costs in line," he said.

Misek said that BlackBerry should concentrate on its software, which is still the companys strongest asset.

"Im not aware of, globally, any instance where its been hacked, but I can point to many instances where their competitors have been hacked," he said.

"On the software and services side, they really need to become aggressive, focused and convince companies that their software really can manage Android, iPhone and Windows devices and do so better than anyone else in the market."

Misek said BlackBerry should give itself until Christmas to figure out whether it can sustain the manufacturing side of its business model.

"If they dont have a good holiday season [in terms of sales] then it makes sense for the business to be in someone elses hands," he said.

BlackBerry declined all requests for an interview.