With BlackBerry?s fortunes continuing to erode, the company is exploring a possible sale or strategic partnership. One possible alternative is an exit from the smartphone market, so it can rebuild around BlackBerry Messenger.

An important early player in mobile, BlackBerry, which was known as Research In Motion until recently, has watched its star fall dramatically despite repeated attempts to rebuild the brand. Possible suitors include competitors in the smartphone market or an investment group.

?I do see a strong play for a private equity/investment group making a play for BlackBerry because they can sell off parts of the company and bring the focus back to the technology play,? said Steve Brumer, a partner at 151 Advisors, New York.

?I would sell off or spin off QNS as an entity,? he said. ?I would sell off the smartphone technology and patents and exit the market.

?Finally, I would focus only on the enterprise/SMB/BBM software and licenses markets and build the recurring revenue model.?

Touch screen era
BlackBerry said yesterday that it is exploring a potential sale of the company or a joint venture. The company has formed a special board committee to oversee the process, signaling that perhaps it is more serious about exploring alternatives than a year ago when it said something similar.

The move reflects how BlackBerry 10, which was introduced earlier this year, has not had the positive impact that the company was hoping for.

BlackBerry was slow to react to the switch to touch screens, an oversight that the new BlackBerry 10 operating system addresses. However, recent figures from IDC show that BlackBerry has a 2.9 percent share of the market, putting it in fourth place behind Windows Phone.

BlackBerry said it is exploring strategic alternatives in order to accelerate the deployment of BlackBerry 10, which it believes has compelling long-term opportunities.

?We are six years into the touch screen smartphone era, since the first iPhone was launched in 2007, and BlackBerry still does not have a credible device portfolio with which to challenge Apple or Samsung,? said Neil Mawston, London-based executive director of the global wireless practice at Strategy Analytics.

Strong competition
Besides losing ground with consumers, BlackBerry?s grip on the enterprise market is also weakening as Apple and others increasingly make inroads.

?BlackBerry was far too proud of its mobile enterprise services, and it repeatedly ignored warnings over the years that Apple and others were eating its lunch,? Mr. Mawston said.

While the smartphone market continues to grow, it is increasingly competitive, with new mobile operating systems finding it difficult to catch on given the already wide adoption of iOS and Android.

For example, Microsoft?s Windows Phone 8 was introduced around the same time as BlackBerry 10 with similar intentions of grabbing market share from iOS and Android, but that has not happened despite fairly strong marketing support behind Windows Phone.

Under these circumstances, it may not even make sense for BlackBerry to remain in the smartphone market.

?I do believe that if the smartphone portion of their business was removed from the market, that BlackBerry would survive as a leaner and profitable company,? 151 Advisor?s Mr. Brumer said.

Apple a possible suitor
However, BlackBerry owns enough mobile patents to make the company attractive to one of its competitors.

For example, the fast-growing Chinese smartphone vendors, such as Lenovo or Huawei, might be good partners for BlackBerry.

?BlackBerry?s software expertise could be married with Lenovo?s hardware distribution expertise,? Strategy Analytics? Mr. Mawston said. ?However, security issues may hamper any takeover by a non-North American or Western European company,?

Other possible suitors include Microsoft, Google or Cisco, any of which might be interested in BlackBerry for its enterprise expertise.

Even Samsung or Apple could be interested.

?While not key to market share, [a Samsung] purchase would largely be defensive to keep BlackBerry's IP out of the hands of key competitors,? said Bob Egan, founder of Sepharim Group, Falmouth, MA.

?Apple is a stretch, but BlackBerry's NOC could enable a tightly controlled, direct carrier/device network should Apple want to build its own mobile payment network,? he said.

One interesting possible scenario is that a technology firm outside of the smartphone arena might be interested in BlackBerry to gain a foothold in the industry.

Or BlackBerry could take the company private, so it could better focus on developing cutting-edge technology.

?Nintendo of Japan, which needs an entry into the smartphone world, could run the rule over BlackBerry,? Strategy Analytics' Mr. Mawston said.

?We recommend BlackBerry take the firm private via private equity, so top management can concentrate on developing better smartphone and tablet products without the constant distraction of the Wall Street spotlight every two or three months,? he said.

Management issues
This is just the latest attempt by BlackBerry to address its growing problems.

Last year, co-chairmen and co-CEOs Jim Balsillie and Mike Lazardis stepped down and Thorstein Heins was named the new leader of the company.

While the company said at the time that it was exploring strategic opportunities, there was significant anticipation in the market that BlackBerry 10 could breathe new life into the company.

?The key learning aspect of BlackBerry will be based on management issues that started many years ago, when greed and selfishness reigned,? 151 Advisors? Mr. Brumer said.

?When we get to the business school classrooms, lectures on the BlackBerry case study will discuss how management refused to accept the market trends and make the business decisions it needed to grow and compete,? he said. 

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York