As suitors line up for Blackberry, what lies in stock for this ‘has-been’?

After more than a year since the news first surfaced, Canadian smartphone laggard BlackBerry came into the spotlight once again last week as the company announced it was forming a special committee to review the always-ominous "strategic alternatives." And while it's abundantly clear that BlackBerry desperately needs a tech sugar daddy, what's less obvious is who would want to snap up shares of the struggling smartphone maker.

While the company does have some valuable assets, there's also that whole declining smartphone business, which makes the overall value much less attractive.

Just a few months ago, BlackBerry seemed dedicated to going alone. Now, the company is surprisingly blunt about its willingness to consider a joint venture or selling the company. Why now? Well, the crucially important “value” model Q5 launched about six weeks ago in the UK and Africa, markets that used to be BlackBerry’s cornerstones just two years ago. The Q5 gained sudden importance after the high-end Q10 and Z10 phones put in disappointingly weak volume performances during the May quarter, driving BlackBerry’s U.S. market share down to just 1.1% according to one estimate.

The problem with the Q5 is that it is priced well above $400 (about N65,000). That is the dead zone of the current smartphone market where the $600-plus (about N96,000) niche belongs to Apple and Samsung and value buyers are migrating towards sub-$200 (about N33,000) phones. Funny enough, Windows keep garnering strength in this region with the ubiquitous advantage Nokia brings into the equation.

BlackBerry received early sales numbers from the Q5 by the end of July from its most important Western base in the UK and the key emerging markets like South Africa and Nigeria. It is quite likely that these early Q5 figures were so scary they pushed BlackBerry into the radical decision of publicly announcing it may need a buyer.

There is no sign of BlackBerry being close to launching a true budget device; the upcoming BlackBerry Z30 looks like high-priced white elephant and no other BlackBerry 10 phones are expected to launch this year.

So in August 2013, BlackBerry finds itself with a product portfolio of two luxury models and one expensive mid-market model — and with an imminent launch of a high-priced phablet. This is the moment when BlackBerry’s board of directors has finally realized the current pricing approach has placed the company on the road to ruin.

The problem is that even if somebody opts to buy BlackBerry, it would take until the end of 2014 to really implement a substantial product course correction. The good news is that the company has billions of loonies in cash and it will take a long time to burn through to the hoard. There is still time. There are fascinating potential combos out there: DellBerry, LenovoBerry, SonyBerry. All of them would combine two fading consumer electronics lines, but it’s true that the oddball Sony Ericsson melange came very close to actually succeeding in mid-nineties.

Enter Warren Buffet! This investment tycoon from Canada is emerging as one of the leading bidders for BlackBerry, as analysts point to the likelihood of a private equity buyout for the beleaguered smartphone maker. Prem Watsa, the boss of Toronto-based Fairfax Financial Holdings, resigned from BlackBerry's board on Monday, just seven months after joining, and is now expected to try to orchestrate the company's stockmarket exit.

Having spent an estimated $880m (£570m) buying nearly 10% of BlackBerry's shares at an average price of $17, the 61-year-old is the company's largest shareholder and he is sitting on a potential $270m loss.

But the Indian-born chemical engineer has made his fortune from championing apparently lost causes, having left his home for Canada with $8 to his name. Fairfax was one of a small group of institutions that bought a 35% stake in Bank of Ireland from the Irish government during the height of the eurozone crisis, and has earned a positive return on its investment. Now Watsa is betting on a Greek recovery, declaring recently that "a bottom has been reached" in the decline of the European Union's most troubled economy.

He was an early skeptic on the US property market, predicting the sub-prime housing collapse years before it happened, and used the proceeds of that bet to invest in the shares well before their recent rebound.

Watsa's investment strategy means his firm's stockmarket value of $8.3bn is now greater than BlackBerry's, which has crashed from a pre-credit crunch height of $55bn to $6bn today.

Industry watchers think a sale to another handset maker or Technology Company is unlikely. Despite the company's determination to reinvent itself under chief executive Thorsten Heins, observers say a trade bid would have emerged by now if rivals were truly interested in the wake of the sidelining of founder Mike Lazaridis and his business partner Jim Balsillie 18 months ago.

Watsa's move is therefore being seen as the first tangible sign of a financial solution to BlackBerry's woes. "We believe Fairfax along with other Canadian pension funds and banks are considering taking BlackBerry private," said Peter Misek, an analyst at Jefferies bank.