BlackBerry Ltd (NASDAQ:BBRY), (TSE:BB) is, according to rumors breaking in recent days, going to put Google Inc (NASDAQ:GOOG), (NASDAQ:GOOGL) Android on a new smartphone. There are mixed feelings about the story on Wall Street. Some feel that jumping to Google’s popular Android OS could save the firm, while others feel the move shows Blackberry is in “dire straits.”
Trip Chowdhry of Global Equities Research told Benzinga on Friday that if the rumors are true the decision from CEO John Chen comes from a “position of weakness” rather than one of strength.
Blackberry might be strong with Google
Reuters said last Friday that multiple sources were giving it information about plans from BlackBerry to use Android on its next line of smart phones. Right now BlackBerry phones use BB10, software built by the firm itself. Since CEO John Chen has taken over, however, he has talked about making BlackBerry services work on all devices, including those from Google.
With that in mind, it’s hard to see how putting millions into the creation of another OS is a good idea. Carolina Milanesi, chief of research at Kantar WorldPanel says that BlackBerry may try to “appeal to enterprise users by offering a highly secure Android device.”
Phones that run BB10 are already able to run Android apps through its QNX platform, meaning that there is not much of an ecosystem benefit to switching to Google’s OS.
Rob Enderle of Enderle consulting told Reuters that partnering with Google “is a great way for BlackBerry to get visibility. It really doesn’t hurt them much, and the upside is high.”
Even if Blackberry is, like Mr. Chowdhry says, coming from a place of weakness with the idea of a Google Android partnership, that doesn’t mean that the idea is a bad one. There are a lot of reasons why a BlackBerry Android option could help the company reach its goals.
BlackBerry shares jumped on Monday on the rumors. It seems that Wall Street would, after all, welcome a move to Android. At time of writing, just before 2PM EDT, shares in the firm were up by 1.84%. At the same time shares in the wider stock market, measured by the S&P 500 were down by 0.5%.
Blackberry will fail on Android
Mr. Chowdhry is clear, however. “only a failing company will go and use Android six years after it has been launched,” he says. According to the Wall Street sleuth BlackBerry is going to get weaker as time goes on, and this shows that the firm is out of good ideas.
There’s no telling if BlackBerry is really going to shift its efforts to Android, but the Reuters report on the rumor used strong language and had multiple sources to back it up.
That means that there is every change that BlackBerry is heading to the Google Android platform, and the firm can only suffer as a result according to Mr. Chowdhry and many other analysts.
Jack Gold of J Gold Associates told Computerworld that “Phones are a very low margin business, and Android would be even lower margins.” He said that the move to Android may kill the BlackBerry handset business once and for all.
He said that a BlackBerry Android release would surprise him. On the other hand a move by BlackBerry onto Android could be very positive for Google as the firm tries to get involved in the enterprise world.
Update 13:40 EST: Added paragraph on Blackberry’s share price movement on Monday.