According to theage.com from Australia, BlackBerry plans to license its new operating system to entry-level devices.
"We are looking into licensing [for lower-cost devices]," BlackBerry chief executive Thorsten Heins told Fairfax Media on Thursday during an international media briefing at the company's headquarters in Waterloo, Canada.
I not only think this is a good idea, I think it's the best idea BlackBerry has had in a long time. By licensing the BB10 OS to third-party OEM manufacturers, BlackBerry will:
leverage production and marketing capabilities
Build up the BlackBerry ecosystem
Secure revenue and profits that it would otherwise not have
At the same time, be allying itself with third parties in the lower-priced handset market, BlackBerry is positioning itself to take advantage of markets where it either has no presence today, or would not have had in the future either.
But this is not the first time we hear of this. There have been rumors of BB OS licensing deals for a long time. In fact back in August of 2012, BlackBerry's CEO Thorsten Heins hinted at just that.
So the fact that BlackBerry wants to do a licensing deal is nothing new. The question is, for whom do the BlackBerry licensing bells toll?
Well we all know China's Lenovo (OTCPK:LNVGY) has an interest in BlackBerry. And while a Lenovo buyout of BlackBerry, as Bloomberg hinted might raise regulatory hurdles, a licensing deal is the next best thing. Lenovo needs something new to take on Samsung (OTC:SSNLF) in China, and the BlackBerry brand might help a lot in that regard.
Also, while BlackBerry will not offer the Z10 handset in Japan, because the company cannot justify the cost of modifying its operating system to accommodate the Japanese language, there is no reason why it cannot do a licensing deal with a Japanese company and let that company handle the BlackBerry brand on a franchise basis in all of Japan.
In fact, Sony (NYSE:SNE) might be the perfect candidate. Its smartphone division is bleeding and it has not been able to gain any traction in North America, where Apple and Samsung are beating Sony anywhere one looks. The company overall has not been able to distinguish itself in any way, and while the new Xperia Z handset will give every premium smartphone marker a run for their money, the question remains if Sony can gain a respectable share of the world market or not. However, if Sony were to modify the BlackBerry OS and put it on its own handsets, then that should partially at least get everyone's attention.
The bottom line is that BlackBerry will only get stronger if it licenses out its operating system, while at the same time it will enrich its ecosystem.
Let's not forget that the company does not have a big tablet presence at the moment. That might change, if all of a sudden several million people who have never heard of BlackBerry before, all of a sudden discover the BlackBerry ecosystem and decide they like it and then decide to buy a tablet also.
Anyway one looks at it, licensing is a win-win proposition for everybody, especially for BlackBerry.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.