Lenovo Could Make Acquisition Offer To Blackberry By End Of The Week

News
By Lucian Armasu
published

Today, a published report from the technology news site Benzinga suggested that Blackberry is going to be acquired by Lenovo, which is expected to make an offer by the end of this week. The news led to a 6 percent surge in Blackberry's stock price. The source said that Lenovo could start by offering $15 per share, but that a deal will probably be made around $18 per share.

Almost two years ago, in January 2013, Lenovo's CEO Wong Wai Ming said that Blackberry was one of the companies it was considering buying. Early this year, Lenovo announced plans for its acquisition of Motorola, so many thought that Lenovo was done buying companies for a while. However, Lenovo seems to want to enter the western enterprise market, and one way to do that faster is to buy Blackberry.

Blackberry is not nearly as powerful as it once was in the smartphone market, but there are still over 91 million BBM users, and the company's brand is recognized in the enterprise as a smartphone brand for professionals.

Blackberry's CEO, John Chen, has also tried to focus more on services and the enterprise market lately, which means Lenovo doesn't have to start from scratch in terms of enterprise product and service development.

"Lenovo is serious about becoming a worldwide player," Bob O'Donnell, chief analyst at TECHnalysis Research told CBC News in an interview. "People want an answer to iOS or Android and there is BlackBerry with BB10."

BB10 is indeed a solid operating system, but it never had any chance against Android, iOS, or even Windows Phone and Microsoft's billion dollar investments. Lenovo has the money to push the platform harder, if not in the consumer market (where the company will probably focus more on Motorola), then in the enterprise market where it has a stronger name.

Lenovo also bought IBM's low-end x86 server business this year for $2.3 billion, another sign that the company is looking for new growth businesses. Lenovo is already the number-one PC manufacturer, but although PCs are still a cash cow for the company, it's not a big growth market anymore, so the growth needs to come from elsewhere.

The smartphone market is already quite large, but it has the potential to be several times larger as more people either buy a new smartphone for the first time or upgrade from an older one. With Motorola and Blackberry, Lenovo could gain two smartphone companies that have potential for growth, even if they are currently under-performing. That potential, combined with Lenovo's billions of dollars that it could invest in product development and marketing, could help Lenovo become a stronger global mobile company.

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Lucian Armasu
Lucian Armasu
Lucian Armasu is a Contributing Writer for Tom's Hardware US. He covers software news and the issues surrounding privacy and security.
6 Comments Comment from the forums
  • tinmann
    I might be in a minority when I say that I actually like the Blackberry Passport but it's priced out of the range of practicality for me.
    Reply
  • Orlean
    Since I've been looking at upgrading my phone I naturally was looking at the Note 4, then today I stumbled across the Passport again remembering that I had read about it when it was announced. Did some reading today in regards to the Passport, although I've never used a BB device I really like it, the physical keyboard, keyboard acts as a mouse, wider screen, and from what I read great battery life & browser. I've had Apple(IPhone, IPhone 3GS), Andriod(Samsung S3) which I'm currently using, the funny thing is I'm not in business, I don't have to send PDF files, read hundreds of e-mails a day, the business-y sort of things, but yet, maybe it's just that I want to try something new.

    Now the only downside for me personally, it's only available for purchase unlocked at the moment, and is rumored that it wont be available for contract on my carrier until January/February. It if was available at this time I would most likely choose it over the Note 4 just so I could try something different.

    All in all, what I'm trying to say is for a phone that's geared more towards a corporate environment, it's caught my attention, and I really like that they try to think outside of the box.
    Reply
  • icemunk
    People are drawn to the Passport because it is different. Before the first iPhone came out and changed everything, people all had tons of choices for phones.. sliders, flip phones, keyboard phones, big screens, tiny screens, weird little things.. but then pretty much everyone had quite a selection of build designs. Then, Apple came along and changed the market; all the other companies started following the same design... rectangular phone, with a touch-screen. It's nice to see Blackberry going back to the keyboard, but also going with a huge 4.5" square screen and changing it up a bit. I'm tired of the same design of every phone.. They all look the same. When you take out a Blackberry Passport at a meeting, or a dinner and put it on the table.. people are drawn to it; "What's that?" "Nice, is that a smartphone? It has a classy look and feel to it, and doesn't look like your average everybody phone.
    Reply
  • Gilbert Standen
    Lenovo was interested in buying Blackberry about a year ago. The deal was nixed before it could get off the ground on security concerns by the Canadian government. However, John Chen has made several changes at Blackberry, and it is possible he could sell only part of the company, or establish a partnership similar to the Apple-IBM partnership. The news about the possible buyout offer from Lenovo strongly suggests BBRY stock is oversold and undervalued.
    Reply
  • gm0n3y
    The Canadian government may not allow this to go ahead. Lenovo, like most large companies is China, is controlled to a large extent by the Chinese Communist Party (CPC). The Chinese government forces all large companies to have CPC members on their boards and their operations have heavy CPC oversight. The IT sector especially is kept on a tight leash. People in the West generally are unaware of the level of control that the CPC maintains in the economy. Companies operating in China do so without the expectation of autonomy. The government can (and does) step in whenever they want something.
    Reply
  • TerryFawkes
    I want the Passport, but it's friggen sold out everywhere!
    Reply