A Blog by Jonathan Low

 

Jan 16, 2015

Here's Why Samsung Might Want to Buy Blackberry

A lot of figurative ink has been spilled arguing about the value of technology. But the news that Samsung might be interested in acquiring Blackberry underscores one reason that is frequently overlooked: the enduring interconnectedness of the underlying technologies that have fueled its rise to dominance over the global economy.

Put another way, old brands - and their patent portfolios - never die, they just get re-purposed.

The futility of the legal patent wars has thrown this into higher relief: who created what when is a fool's game. The real economic and financial question is how to mine the value hidden in the multiple technologies that have faded on some macro level but who's basic components continue to contribute to new developments.

We have seen this before: Xerox PARC, HP, Sun, Palm et al. The list is long and the achievements are storied, even if they never quite established the dominance to which they aspired. Blackberry, for all the mockery it has endured, turns out to be pretty good at one feature now considered a crucial competitive advantage: security. They are not the first and they will not be the last but this development, whether they are acquired or not, illuminates the hidden value that is so often the key to future success - for others. JL

Joshua Topolsky reports in Business Week:

Samsung has declared its long-term intentions to enter—and win—the business market for mobile tech. One reason the Canadian phonemaker is attractive to Samsung right now: security. And security is the gateway to the highly valuable enterprise market.
Reports that Samsung Electronics has approached BlackBerry briefly sent the battered smartphone maker's stock soaring. Any deal is far from done and BlackBerry denied it, but the possibility does raise the question: Why would Samsung want to acquire BlackBerry? Yes, the Korean conglomerate would get a robust suite of patents, BlackBerry's powerful (though unloved) new mobile platform, and a history of highly lauded hardware design. Still, there is really only one reason the Canadian phonemaker is attractive to Samsung right now: security. And security is the gateway to the highly valuable enterprise market.
Samsung has already declared its long-term intentions to enter—and win—the business market for mobile tech. The company has been aggressively advertising (and pushing) its mobile security platform, called KNOX. The only problem is that Samsung devices run on Google's Android operating system, which has a storied and rather dark history when it comes to security. So no matter how hard the company may push its security message, it could be unable to sneak out of Google's long shadow.
Buying BlackBerry, along with its portfolio of patents and soft-touch leatheresque phone backs, however, changes the equation. If there is one area where the BlackBerry has been relatively unassailable, it is the security of its devices. Hey, even Obama uses a BlackBerry.
While Apple has made significant inroads in the enterprise market with the iPhone and iPad, Android devices have been a relative laggard. And even Apple hasn't escaped the occasional security scandal (see the 2014 celebrity iCloud photo debacle or BuzzFeed tech editor Mat Honan's terrible experience at the hands of hackers). Bringing BlackBerry into the Samsung family would confer an undeniable aura of security on the company's devices. Even Apple can't claim that at the moment.
The real losers here might actually be Google and Microsoft. The more standalone software components Samsung acquires—that are not core pieces of the Android platform—the further Google gets from its biggest market partner (see Samsung's recent moves to introduce its own Tizen mobile OS). And Microsoft, once dominant in the business market, is being beaten at its own game by Google's suite of low-cost Web apps and completely unable to find a foothold in the world of mobile at all.

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