Why Chinese telecom giant Huawei could buy BlackBerry

June 28, 2013
June 28, 2013

Better learn how to pronounce that (nearly) unpronounceable Chinese telecommunications company’s name, and quickly. (It’s HWA- WAY.) Huawei has hinted in recent weeks that it might be interested in making a bid for BlackBerry, the smartphone developer-manufacturer. For Huawei, that would mark a giant step up, from manufacturer of many others’ non-Apple handsets to becoming an identifiable player in the world’s consumer telephony main stage.

Is now the time to act? Well, BlackBerry just became a lot cheaper—the stock plunged 17% in early trading, following the surprise announcement of a first quarter loss. This is no time for adverse surprises for the struggling Waterloo-based telecoms company. Announcements of new savior products, like keyboard-equipped Q-10 and the all-touchscreen Z-10—both launched over this past winter and spring—would normally persuade “strong holds” to stay calm. But all bets are off when the red ink begins to flow.

Two other factors suggest that BlackBerry’s days of independence may be numbered: First, the decline in subscribers announced last December, which marks a sea change that cannot easily be reversed, and second, cash levels are up at quarter-end to $3.1 billion, from $2.9 billion at the end of the previous quarter.

So, anyone up for paying themselves a “performance fee” using other people’s money?

We welcome your comments at ideas@qz.com

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