Last update: 11-Dec-2013 6:16 am
Wednesday, December 11, 2013
Trinidad & Tobago Guardian Online
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What can we learn from Blackberry’s fall?
The story of the decline, fall and the proposed sale of Finland’s Nokia to Micrsoft and Canada’s Blackberry to the private equity firm Fairfax Financial Holdings should serve as a cautionary tale to Caribbean governments and businesses. At the beginning of this month, Microsoft—which is itself threatened with financial and technological irrelevance—agreed to buy Nokia’s mobile phone business for US$7.2 billion. Between 1998 and 2012, Nokia was the world's largest vendor of mobile phones, according to a BBC report in April this year. Its lead in mobile phones in general has been whittled away by scores of “me-too” phone producers, while in the much higher margin smartphone market, Apple and Samsung have become dominant.
In a sense, Blackberry’s decline is even sadder. Monday’s offer by Fairfax Financial represents a devastating loss of value for the smartphone’s shareholders and potentially the end of a viable technology platform for its millions of users. The reported price tag of the Blackberry transaction, US$9 a share or US$4.7 billion, means that the smartphone maker’s value has declined by nearly 90 per cent in just over five years—from US$149.90 in June 2008 to US$9 today.
Another interesting fact about the sale of Blackberry is that the proposed purchaser, Fairfax Financial, is run by Canadian private equity investor Prem Watsa, who once sat on the Blackberry board and whose firm is the largest shareholder in the company with about ten per cent.
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