Truth or Dare
Even with the denial of both Samsung Electronics and Blackberry, speculation surrounding the acquisition of the Canadian handset maker by the Korean tech giant continues.
According to overseas media outlets on Jan. 15, Samsung is trying to buy Blackberry and secure its patents for as much as US$7.5 billion (8.1112 trillion won). In response to these rumors, a representative of the Canadian company revealed its official position by saying, “We haven't discussed any M&A deal with Samsung.” A representative of the Korean company also stressed, “It is not true.”
This is not the first time that the rumors about Samsung's purchase of Blackberry emerged. Rumors flew quickly back in 2013 as well, but both companies flatly denied the speculation at that time too.
However, specific numbers were mentioned this time.
Industry analysts are saying that the takeover of Blackberry by Samsung will award the Korean firm patents related to B2B and the security technologies of the Canadian company. It will also be possible for Samsung to obtain Blackberry's large customer base in the B2B market. In fact, the Korean tech giant already decided to beef up its efforts to dominate the market staring this year.
The fact that Samsung is accelerating efforts to dominate the B2B market as a breakthrough for its stalled growth is one of the reasons for the speculation. Moreover, security servers and network patents are Blackberry's strengths. In particular, it has a competitive advantage in corporation-oriented smartphones thanks to strong security functions.
An industry source said, “Blackberry's strengths lie in patents for telecommunications, B2B servers, and security technologies. That explains why the rumors over the M&A deal are being circulated.” The source added, “BlackBerry's QNX platform, an operating system for cars, has already supplied to major auto makers like BMW or Volkswagen. So, Samsung may be aiming for the platform.”
If the Internet of Things (IoT) market swings into high gear, the importance of patents for telecommunications and security technologies will grow. Therefore, some in the industry have continued to raise the possibility of the M&A transaction.
However experts point out that US$7.5 billion, which was mentioned this time, is overestimated, and thus it is unrealistic. When a group of companies led by Fairfax Financial Holdings tried to buy Blackberry in 2013, the value of its assets was estimated at US$3 to 4.5 billion for its security-focused messaging platform, and US$2 to 3 billion for patents.
An industry source explained, “There are not many areas that Samsung is paying attention to, other than patents. Under these circumstances, US$7.5 billion is not realistic.” The source added, “As in the case of Google's purchase of Motorola, it is uncertain whether or not an M&A deal mainly for patents will show results as invested.”
On top of that, some argue that the necessity for the deal is not great, as the Korean firm is actively seeking to dominate the enterprise smartphone market with its own technology. In fact, it already commercialized its own security solution called KNOX, which was approved by the Pentagon.
Blackberry used to be a dominant player, before the smartphone market turned into a two-way battle between iPhones and Android phones. Currently, its market share is hovering at 1 percent. As its efforts to survive have yet to produce any tangible results, the once-powerful company is embroiled in speculation over an M&A deal again.