Making Sense Of A BlackBerry Ltd (BBRY) Samsung Deal

BlackBerry Ltd (NASDAQ:BBRY) may be a very strategic acquisition for Samsung Electronics, Vlad Savov of The Verge argues.

The three reasons why Samsung should just purchase BlackBerry Ltd (NASDAQ:BBRY), according to Savov, has to do with its intellectual property and its software.

“BlackBerry’s well-documented struggles as a smartphone maker tend to obscure the strength of its enterprise business. BlackBerry Enterprise Server (BES) is the gold standard for securing and managing mobile business communications. […] This market is unglamorous but reliably profitable, and Samsung has already demonstrated an appetite for it with its own Knox initiative on Android,” Savov writes.

BES will not only bolster Samsung’s presence in the enterprise communications space, it will establish them as the leader in the field. Snagging the lead position in this industry is very difficult, Savov argues, as businesses are reluctant to change conventions, especially if they are tried and tested which BES is. That means Knox will have little chance of supplanting or even gaining a substantial share against BES.

BlackBerry, is BBRY a good stock to buy, Samsung Electronics, Vlad Savov

Another reason why the South Korean giant should buy BlackBerry Ltd (NASDAQ:BBRY) is the company’s QNX platform, Savov said. Just as also mentioned in this report, QNX and ultimately BlackBerry will benefit very much if the Internet of Things continues to grow. Savov notes that the flexible and secure QNX platform is the chief platform for the world’s car infotainment systems. It also has a strong presence in the aerospace, defense, security systems, and medical devices spaces, he said.

By buying BlackBerry, Samsung will get this growing business unit and include another profitable division to its stable.

The last reason given by Savov as to why BlackBerry is a sensible buy for Samsung is the company’s patent portfolio.

“Decades of research and development into wireless systems and devices have built up an enviably deep pool of intellectual property. […] Through its subsidiary, Certicom, BlackBerry owns 130 highly regarded encryption patents — some of which are used by the NSA — that could come into play as more companies and services better secure their software and seek licensing to utilize those patents,” Savov writes.

According to Savov, these patents alone could be worth billions and would make a very compelling reasons for Samsung’s purchase.

Software sales and intellectual property were mentioned last year by Peter Misek who said BlackBerry could triple software sales this year. David Kirkpatrick is another industry observer who is bullish on the company.

Of course, the company has its fair share of skeptics. Gary Vaynerchuk said last December that he expects BlackBerry to go the way of the dinosaurs. Henry Blodget said recently that the only way for BlackBerry to survive is to find a small niche they can own or be bought by some company like Samsung.

One thing is sure, once BlackBerry and Samsung denied any ongoing acquisition talks, the company’s stock was pummeled leading one to believe the market also partly believes it’s better if an acquisition happens.

J. Carlo Cannell’s Cannell Capital owned 912,196 BlackBerry Ltd (NASDAQ:BBRY) shares by the end of September.