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BlackBerry seems to have more than a few lives. The company that has had one foot in its grave for months now has been revitalized through an infusion of $1 billion from its largest shareholder, Fairfax Financial Holdings and “an unnamed group of institutional investors,” according to the New York Times.
After issuing a public plea last month, the mobile company announced that it was no longer on the market, cancelling out a plan that would have seen the company go private under Fairfax Financial for $4.7 billion. The company also announced that CEO Thorsten Heins would be stepping down and will be replaced by interim CEO John Chen, formerly of Sybase, a mobile software company, who will also serve as the executive chair of the company’s board of directors. Fairfax CEO Prem Watsa will also join the company’s board following the investment.
Despite the decision to not go private (for the moment)—which sent shares tumbling 16 percent—there are still entities that could make bids for BlackBerry, including a group that consists of co-founder Douglas Fregain and Qualcomm.
“BlackBerry is an iconic brand with enormous potential—but it’s going to take time, discipline and tough decisions to reclaim our success,” Chen in a statement. “I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”
What exactly the company will “turnaround” is the question. After a disappointing run for its BlackBerry 10 OS and it latest smartphones, the company gave the impression that it would be moving out of the consumer market to focus on its software and B2B prospects—but even those aren’t great. The hiring of Chen and interim CEO, who headed an SAP-owned software company, further indicated the potential direction of the struggling brand.
As of the latest quarter, BlackBerry devices account for only two percent of new smartphone shipments, facing a mountain of competition from brands like Apple, Samsung and Google. With many mobile retailers not even stocking BlackBerry devices anymore, a retreat from consumer electronics may be BlackBerry’s only bet for survival.
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