BlackBerry Ltd (BBRY) Will Not Be Eaten By Huawei

BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) will not become part of Huawei Technology Co Ltd (SHE:002502) according to an executive from the Chinese electronics company. Chen Lifang, a member of the board at Huawei, told Reuters that the company had ruled out increasing its share of the mobile market through acquisitions.

BlackBerry Ltd (BBRY) Will Not Be Eaten By Huawei

Huawei Technology Co Ltd (SHE:002502) is one of the many companies that has been linked with a possible bid for the struggling Canadian handset maker. BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) put itself up for sale a couple of weeks ago

Huawei refuses to buy the mobile market

Huawei Technology Co Ltd (SHE:002502) has been doing well in recent years, particular in its home market of China. The company has been linked to BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) and Nokia Corporation (NYSE:NOK) in recent years as analysts seemed sure the company had ambitions to shift its focus westward. Today’s news undermines those opinions.

“We haven’t considered (an acquisition),” Chen Lifang told reporters “We want to rely on ourselves.” That doesn’t rule out the possibility of an acquisition entirely, but it does resign it to the realm of improbable. Huawei is not looking to spend $5-$10 billion on a Canadian handset maker hell bent on losing money.

There are other problems for Chinese firms looking to acquire telecommunications companies in the United States. The State Department and various intelligence and defense agencies are nervous about foreign ownership of such important companies. Chinese ownership is an even bigger problem.

BlackBerry security trouble

One of the other big names linked to a BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) acquisition is Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992), the world’s biggest PC maker. Lenovo is also based in China and has already been responsible for acquisition trouble in the last decade. The company bought International Business Machines Corp. (NYSE:IBM)’s PC business back in 2005, and complaints about lower quality have hounded the company since.

If BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is looking to reform itself into a successful part of another company, a Chinese firm might not be the best option. The deal could face heightened scrutiny from regulators, and it may give opponents something to concentrate on. The Softbank Corp (TYO:9984) (OTCMKTS:SFTBF) acquisition of Sprint Corporation (NYSE:S) was plagued with similar problems.

There have been no bids for BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) yet, or at least none that have been made public. There have been some interesting rumors, alongside the everpresent Lenovo Group Limited (ADR) (OTCMKTS:LNVGY) (HKG:0992) whispers. Perhaps Apple Inc. (NASDAQ:AAPL) will step in and solve the problem.

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Paul Shea
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