What if BlackBerry were to start licensing its BB10 operating system to the likes of Samsung, HTC, ZTE, and Huawei? These companies appear to be eager to reduce their dependence on Android and are likely to be eager licensees of BB10, and have proven capable of quickly flooding markets emerging markets with attractive phones. In the blink of an eye, Apple will be beat in the markets where it counts.
What will BlackBerry get out of such a licensing arrangement? Licensing will generate significant royalties and much faster proliferation of BB10.
From an investment perspective, BlackBerry will be treated mostly as a software company. Growing software companies are accorded very high P/Es. There are no direct comparisons in the mobile operating system. However, analyzing some other companies is instructive. Let’s take a look at Red Hat. Red Hat provides open source software