BlackBerrys future still uncertain as key deadlin e nears

Its decision week for BlackBerry Ltd., the battered former champion of Canadas technology industry. Monday is the day by which Fairfa Financial !oldings Ltd. is e pected to finali"e a deal to buy the smartphone maker for #$.%&billion '(.).*. +he co nditional offer, for #, a share, is the only thing resembling a takeo-er bid that BlackBerry shareholders ha-e seen since the company formally put i tself on the auction block in the summer. Fairfa is pledging no new money to the deal . it is already the largest sh areholder, at nearly /0 per cent . which makes its bid look like more of a defensi-e mo-e to protect its sunk in-estment. Indeed, some belie-e that Fairfa chief e ecuti-e 1rem 2atsa does not want to buy the company so much as pro-oke another bidder into doing so.

3thers ha-e looked at BlackBerry, but as of )unday e-ening, the only oth er group that appeared to be seriously considering a bid is one compose d of company founders Mike La"aridis and 4oug Fregin, pri-ate e5uity fir m Cerberus Capital Management and (.). chip maker 6ualcomm Inc.

7 close e amination of the group re-eals that its key members ha-e one t hing in common8 a -ested financial interest in pre-enting the auction, an d BlackBerry itself, from failing.

9ach of the partners would enter the consortium with -ery different moti -es.

For the co&founders, particularly Mr. La"aridis, the former co&C93, it is a chance to protect their personal wealth, much of which is tied up in Black Berry stock. +here is also a 5uestion of legacy8 Mr. La"aridis has said he i s loath to see a break&up of the once&great Canadian company, an engine of the 2aterloo economy and pride of the region. !e is a staunch nation

alist and fiercely protecti-e of what BlackBerry brought to the world.

!e also belie-es in the BlackBerry /0 platform that was supposed to turn around the company, and likely feels that its failure to reignite sales says more about the plan by current management than the technology itself. !e is inspired by past turnarounds of fallen tech giants IBM, 7pple and In tel. 2hate-er his plan is to fi the company, it is as much dri-en by emoti on and sentiment as by corporate strategy.

6ualcomms interest is easier to pinpoint8 It is the one tech company wit h the most to lose if BlackBerry fails. 6ualcomm, a ma:or supplier of sem iconductors to mobile de-ice makers, likely earns tens, if not hundreds of millions of dollars per year selling its chips to BlackBerry.

But 6ualcomm also uses its clout and market power to s5uee"e a second ary re-enue stream from BlackBerry and other customers8 licensing royal ties, which make up close to one&third of its total re-enues and a signific antly higher proportion of its operating earnings.

)enior industry sources estimate 6ualcomm earns in the range of ; per c ent to < per cent of BlackBerrys total re-enue from royalties paid by Blac kBerry. +hat would amount to hundreds of millions of dollars per year in payments, and it is almost pure profit for 6ualcomm.

6ualcomm is flush with cash, but may be more dependent on BlackBerry s continued -iability than obser-ers reali"e. In its most recent financial di sclosures, 6ualcomm states that it =deri-es a significant portion of licensi ng re-enues from a limited number of licensees> . one of which, sources say, is BlackBerry. =3ur future success depends on the ability of our licen sees to de-elop, introduce and deli-er high&-olume products that achie-e and sustain customer acceptance.>

+ranslation8 If BlackBerry stops making de-ices and breaks apart, it woul

dnt hurt 7pple, )amsung or ?oogle . but it would bite into 6ualcomms f inancial performance. @oining a successful bid also gi-es 6ualcomm the o pportunity to be the first&in&line bidder for BlackBerrys considerable pat ent portfolio should the turnaround fail.

=6ualcomm wants to keep BlackBerry in business, but if it blows up they l ikely get carcass rights,> one senior tech industry obser-er said.

+hat lea-es Cerberus, whose in-ol-ement is the most hopeful sign for the future of BlackBerry8 it is the one potential bidder with no e isting financ ial interests to protect. It is not :ust a financial engineer or a -ulture fund that strips companies for parts, but rather an operationally&focused in-es tor with a track record of turning around distressed companies, including 7ir Canada and +eleglobe.

Its presence at the table alone suggests all is not necessarily lost for Blac kBerry. But it also doesnt guarantee current in-estors will get a lot more than #, for their shares.