One of the nice things about Microsoft is that they usually have a huge cash pile on their balance sheet. According to this article at Tech Times, Microsoft is sitting on a cool $107 billion in cash and investments. Then, add the fact that as of today, Microsoft is valued at roughly $380 billion, the company CEO has a lot of money to play with.
This situation is no different from say you are at a candy store and buying the most expensive candy on sale is still going to leave a lot of money in your pocket. With that in mind, and the rumors that Blackberry is putting itself on sale, it got me thinking.
Should Microsoft buy Blackberry? I would say no.
Reason #1: MS has enough dying mobile brands in its hands to last a lifetime.
I remember the good old days when almost everybody in my house was using a Nokia phone. There are 5 members in my family, and all of them adults. All of them used a Nokia phone and would not settle for anything else. Today, we have much more phones in our family and no one, except me, is using a Nokia phone.
I don’t need to look up some serious study on market research to recognize that Nokia really lost the plot a few years ago. How else can anybody explain that a company such as Nokia’s main division being bought for $7.2 billion? For reference, Facebook bought WhatsApp for $19 billion. Sure, its apples and oranges but you get the point.
That means, Microsoft is still thinking (or regretting) about a brand that nobody wants. Sure, we are big fans of windows phones here at WMPU but even we have to admit that nothing has changed as far as the windows phone ecosystem is concerned. Any synergies that Microsoft hoped to show with the purchase, are yet to bear any fruits. I mean, we haven’t seen a flagship device in almost 2 years. Sure, Windows 10 Mobile holds great promise but for now, it does not look that good.
At this stage, buying another ailing device maker simply does not add up.
Reason #2: BB won’t be much of a patents play.
Blackberry used to be a huge player and it still (probably) has fans in the enterprise world. It also has patents that Microsoft might feel like getting its hands on. Then again, Microsoft makes much of its money in Enterprise any way and appears to be moving away from its patent business and building better relationships with Android OEMs. It already prioritizes iOS (and to some extent Android) over windows phone. It’s already building apps and services for enterprises and focusing on the mobile platform. Not to forget, a huge swathe of Android manufacturers already have licensing agreements in place with Microsoft.
So yeah, more patents is always good, but maybe not for today’s Microsoft.
Reason #3: MS simply takes ages to integrate anything.
Maybe its just me, but I am sure some people will agree with me on this. Microsoft, as a company, has too many fingers in too many pies. Being ubiquitous is a good idea and it is one of the things that I like about Microsoft. Confirmed reports point to the fact that Windows 10 will be a free upgrade for the 1st year. No one will be surprised if Windows 10 eventually becomes available for free. That means, whatever revenue Microsoft makes by selling Windows, it is about to forego it. Yet, this does not bother the shareholders or anyone who is betting on Microsoft. Microsoft is already at a point where it is a ‘Services and Devices’ company. Products like ‘Windows’ aren’t really expected to make any money for MS in the long run.
Having diversified income is the good part about fingers in too many pies. The bad thing is, the integration of anything outside the company’s original plan does not happen as smoothly or quickly expected. I want to go back to the Microsoft – Nokia situation to illustrate. Ever since Nokia joined hands with Microsoft to make windows phones, it was a given that Nokia had almost become a division of Microsoft. That means, Nokia and Microsoft have been in bed together for at least 4 years now. Nothing special actually came out of it.
In fact, I would also like to point fingers at Skype and the Xbox Division. These guys are under the fold of Microsoft and yet, they deliver sub-par experiences on windows phone. Skype on windows phone was a complete joke until a year ago. Xbox on windows phone is so bad, it’s best not to talk about it. Skype and Xbox almost work independently of Microsoft. Any new acquisition, such as Blackberry, would probably end up operating independently.
Could you imagine that? Two mobile phone type divisions inside a single company? Just not cool.
Reason #4: aQuantive
A few years ago Microsoft bought an online advertising company for $6 billion. Then, later Microsoft took a write-down for roughly the same amount, five years later. Sometimes, I wonder when Nokia purchase will end up becoming a $7 billion write down for Microsoft. Things only get worse when you add Blackberry into the fold.
For every argument above, there will be a counter argument for sure. However, this case is special because Microsoft has already purchased a phone company. There simply is no point in buying another, ailing phone maker.