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Tuesday, August 27, 2013

BlackBerry could spin off BBM as a separate company

BlackBerry, which has already announced it is open to selling the company among other possible strategic options, is planning to spin off its messenger service, BBM, as a separate company. BlackBerry has already started shifting executives to the BBM team, the WSJ reports. The company had earlier announced plans to launch the widely popular BBM service on Android and iOS this summer, though it has not announced a specific launch date, yet.
BBM was one of the key USPs of BlackBerry smartphone apart from its email service, which made it very popular among youngsters that were not initially the target audience. However, the smartphone maker saw an opportunity and launched low-cost BlackBerry smartphones and worked with carriers to reduce the monthly subscription fee for BBM to attract youngsters. At its peak BlackBerry had in excess of 70 million users, which have now come down to about 60 million.
The spin off might come across as too little and too late, considering messaging services like WhatsApp boast over 300 million monthly active usersLine with over 200 million users and Chinese messaging service WeChat claiming 100 million registered users outside China. However, spinning off BBM into a separate company would be seen as a valuable asset in case of an acquisition rather than getting no significant value when clubbed with the smartphone division.
BlackBerry has been working on BBM for other platforms both mobile and desktop but the company always viewed the messenger service as a key USP for selling its BlackBerry smartphones. However, now the management thinks launching BBM for Android and iOS could keep BlackBerry smartphones relevant for existing users as other messaging alternatives have ensured buyers don’t have to buy a BlackBerry smartphone for BBM alone.
It looks quite clear that BlackBerry will get sold off as a single company, considering its advisers have beentrying unsuccessfully for a sale since last year. In all probability BlackBerry will be broken off into multiple assets and sold off to different entities.

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