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.