BlackBerry may spin off its profitable BBM (BlackBerry Messenger) business as it restructures its assets to increase value and, most likely, prepare the ground for sale.
As speculation mounts about who might acquire the ailing mobile vendor ‘ Chinese players like ZTE, Lenovo and Huawei are most discussed in this latest round of rumors ‘ BlackBerry is planning to create a separate entity, BBM Inc, according to The Wall Street Journal.
BBM provides only about one-fifth of its owner’s revenues, but the lion’s share of its profits, and the Canadian company has been looking to boost those profits by porting its crown jewel to other platforms. It will appear on Android and iOS devices this year.
With the ties between the messaging service and the BlackBerry hardware severed, a spin-off of the former will not come as a surprise. Other fundamental changes are expected as the company continues to make losses despite the launch of BlackBerry 10, its make-or-break product for the smartphone market. Earlier this month, the firm announced that it had formed a special committee to consider strategic options, including “possible joint ventures, strategic partnerships or alliances, a sale of the Company or other possible transactions’.
BBM has been very popular in some important growth markets including European teenagers and Indonesia, but it has not proved enough on its own to deliver the sales breakthrough its supplier needs for BB10. Indeed, according to the WSJ report, its user base has fallen from 80m a year ago to 60m , hence the expansion to Android and iOS, and even a partnership with Samsung (once tipped as an acquirer) to target African users. However, BlackBerry has struggled to expand BBM beyond being a messaging service ‘ it recently closed its BBM Music service after less than two years, and its social network, BBM Channels, has appeared very late in the day to take on Facebook.