The prospect of a Samsung-BlackBerry deal has industry watchers thinking Samsung could be poised for a significant enterprise mobility power play to challenge Apple.
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Reuters reported this week the South Korean technology giant is interested in buying the once-mighty Canadian mobile company for $7.5 billion. Both companies have denied the report and BlackBerry went so far as to publish a statement saying it is not engaged in discussions with Samsung on a sale.
Still, the report sparked discussion in the enterprise mobility community about what a possible takeover of BlackBerry by Samsung would mean to both companies, and the market as a whole.
When BlackBerry Enterprise Service (BES) 12 was unveiled in November, it came attached with several partnerships aimed at growing BlackBerry's IT market. One partnership is with Samsung and starting this year, BES 12 administrators can connect to Samsung Galaxy devices running Knox to gain the security benefits of both platforms.
At the time, the move was a bit of a surprise since Samsung had appeared to posit Knox as an alternative to BlackBerry. However, this also came after Google launched its own container framework within Android Lollipop that borrowed components of Knox from Samsung.
If a Samsung- BlackBerry deal were to occur, the most valuable BlackBerry assets to Samsung are its patents and its install base among enterprises, said Jack Gold, analyst and principal at J. Gold Associates LLC in Northborough, Mass.
BlackBerry has historically found a strong foothold in highly-regulated markets and Samsung has made some inroads there, but buying BlackBerry outright could be the strongest option to make that play.
"Sometimes it's cheaper to buy a competitor to get into a market than to try and establish yourself," Gold said.
BlackBerry's QNX operating system could become the basis for any Samsung foray into more Internet of Things-like devices or services, Gold said, and gaining BES would give it more of a footprint within enterprises.
"Samsung has been trying to get into the software business now for some time and they would get that [from BlackBerry]," Gold said.
Samsung could want to keep all of BlackBerry's assets out of the hands of competitors and leverage the BES platform for itself as a possible replacement for Knox, said Craig Mathias, founder and analyst with Farpoint Group in Ashland, Mass.
The future of BlackBerry handsets
Buying BlackBerry could also give Samsung an opportunity to chip away at Apple's dominant enterprise mobile device market share. In a 451 Research ChangeWave survey from August 2014 of 1,544 IT respondents, 37% planned to buy Samsung smartphones for employees in the next quarter while 19% planned to buy BlackBerry. That's compared to 75% who plan to buy Apple smartphones.
"Samsung is primarily looking over its shoulder at Apple and will be looking for ways to be more competitive against Apple," Gold said. "[BlackBerry] would be a differentiator [for Samsung] against all the other Android players out there. It's a commodity market."
On its own, BlackBerry's device business is "hopeless," said Michael Finneran, analyst at dBrn Associates Inc. in Hewlett Neck, N.Y. Device sales for BlackBerry dropped from 4.3 million devices in Q3 of fiscal year 2014 to 1.9 million devices in Q3 of fiscal year 2015.
Jack GoldAnalyst, J. Gold Associates LLC
If Samsung buys BlackBerry, it could decide to cut off the device portion of the business if it is really just buying BlackBerry for its patents and software, Finneran said.
"[Samsung] would take the emotion out of a decision like that," Finneran said. "They would do it for pure business reasons and ask, 'Is there enough demand out there?' They could say it's time to shut down that part of the business and take what's required to move forward."
Another option is keeping the handsets and offering lines of products specifically geared towards government or business, Mathias said.
"We're going through a period of consolidation in mobility in general," Mathias said. "Samsung is clearly a supplier and it's a question of who ends up with the most goodies. [Samsung] could get that with BlackBerry."