The encryption technology that helped build Canadian smartphone maker BlackBerry into a global player is likely to be the centre of a review from the federal government, if any foreign takeover offers emerge.
Treasury Board president Tony Clement said Tuesday that national security interests will be considered, but that Ottawa is watching from the sidelines as BlackBerry shops its assets to technology companies around the world.
Clement stopped short of saying what would be of particular focus for officials.
"I think we'll let the marketplace respond," he said at a Canadian Government Technology event in Ottawa.
"We have a role to play obviously, which involves national security, and making sure that what occurs is in the public interest."
While analysts have frequently discussed how BlackBerry (TSX:BB) has fallen behind in the consumer market, one area that is often overlooked is the company's encryption technology, which is especially important for business customers.
The Waterloo, Ont., company has built its reputation on protecting highly-sensitive information from being decoded for international or corporate espionage. It has said it doesn't store or have access to the encrypted data.
"The encryption is probably some of the most rarefied science you can imagine in the telecommunications space," said Carmi Levy, an independent telecom analyst.
"Those secrets are guarded very closely."
BlackBerry has run into numerous challenges over its encryption technology. Countries such as the United Arab Emirates, Indonesia and Saudi Arabia pushed to ban some of the device's services because governments can't monitor content as it passes through the system.
India also pushed for BlackBerry to provide access to its BlackBerry instant messaging service.
Their concerns centre around national security, since traffic over BlackBerry's instant message service is extremely difficult to intercept and monitor.
BlackBerry also owns a series of data centres which serve as hubs for transferring information through the company's servers.
All foreign takeovers are reviewed under the Investment Canada Act to ensure they are a "net benefit" to the country and passes a national security test.
Last month, BlackBerry received a conditional takeover offer from Fairfax Financial (TSX:FFH), BlackBerry's largest shareholder, worth $9 per share. The offer values the company at US$4.7 billion and Fairfax has said the consortium of unnamed buyers would be composed entirely of Canadian investors.
Fairfax aims to sign a definitive agreement for the transaction by early November.
However, other interested buyers are also circling the company, according to reports from various media outlets. The international tech names possibly interested run the gamut from Google, Cisco and SAP, to Microsoft and Cisco.
BlackBerry reported dismal earnings after sales of its new line of BlackBerry 10 phones tanked. Last week, it said it expects to face costs of at least US$400 million before the end of May 2014.
The expenses are tied to the severance payments for the layoffs, as well as reworking its smartphone lineup and other changes to its manufacturing, sales and marketing operations.
This week, it announced that it was laying off about 300 head office employees as part of a previously announced cost-cutting plan that will reduce its workforce by about 40 per cent.
BlackBerry began handing out the notices on Monday, though the cuts have been ongoing across its global operations for several weeks. The company plans to eliminate 4,500 jobs over the coming months.
Once the cuts are complete, BlackBerry will have cut more than 7,000 employees since 2011, a steep decline from a total staff that once neared 20,000.
Clement said Waterloo is "brimming" with bright technology thinkers, and he was sure new innovative Canadian products would emerge in the wake of BlackBerry's troubles.
"We're all very hopeful they will get through to the other side of what will probably be a restructuring of their mission and their product, whatever happens," he said.
"It's a Canadian product, we have some pride in that," he said.
BlackBerry shares ended Tuesday three cents higher at $8.23 on the Toronto Stock Exchange.
— With files from Ben Makuch in Ottawa.
For more than three years, iPod sales <a href="http://www.zdnet.com/the-ipod-is-on-life-support-7000001573/">have been on the decline</a> as Apple users opt for iPhones and iPads instead, according to ZDnet.
If the last time you gave out your home phone number was in elementary school, you're not alone. Half of Americans have <a href="http://www.mobilenapps.com/articles/5976/20121228/landline-phones-dying-u-s.htm">gotten rid of their landline</a>, according to a recent survey of 20,000 households by the Centers for Disease Control.
The economic downturn accelerated the decline of the newspaper industry, as advertisers continued to pull their dollars. More than 100 newspapers <a href="http://www.businessinsider.com/the-death-of-the-american-newspaper-2009-7?op=1">shuttered in 2009 alone</a>, according to Business Insider. And the downward spiral isn't over; circulation is plunging and Wall Street is getting frustrated with the industry, <a href="http://www.ajr.org/article.asp?id=4111">according to the American Journalism Review</a>.
Yes, there was a time when you had to wait days to see those photos of you and your friends from last night. But thankfully for all of us narcissists, those days are coming to an end. Cameras that actually require film, a dark room and non-digital albums are on their way out as evidenced by the<a href="http://www.huffingtonpost.com/2012/01/04/kodak-bankruptcy-chapter-11_n_1184101.html"> bankruptcy of photo giant Kodak</a> last year.
Video Rental Stores
With Netflix, On Demand, HBOGo and a variety of other video watching services available, the days of going to your local (or giant chain) video store are numbered. Once a go-to spot for tweens looking for a Saturday night activity, rental giant <a href="http://dealbook.nytimes.com/2011/03/10/bankruptcy-judge-approves-sale-of-blockbuster/">Blockbuster filed for bankruptcy</a> in 2011.
Once the go-to gadget for business people and BBM-loving sorority sisters alike, the Blackberry has lost its cache (and <a href="http://www.therecord.com/news/business/article/844005--rim-shares-fall-on-report-of-declining-u-s-market-share">marketshare</a>) to the iPhone and Android. The brand <a href="http://www.usatoday.com/story/money/business/2012/10/08/brands-most-value-lost/1619827/">lost 39 percent of its value</a> last year, according to 24/7 Wall Street. We can't say we'll miss those blinking red lights.
Nowadays all a physical CD really has to offer is album art. And the numbers prove it: CD sales <a href="http://www.cnn.com/2010/SHOWBIZ/Music/07/19/cd.digital.sales/index.html">accounted for 20 percent</a> of overall music sales in 2009 compared to 90 percent in 2007, according to CNN, prompting the news organization to ask "Is the death of the CD looming?" We say, yes, probably.
Creepy listings for sex, cars, puppies and apartments have now moved to the internet. Classified <a href="http://www.poynter.org/latest-news/business-news/the-biz-blog/100565/classified-ad-revenue-down-70-percent-in-10-years-with-one-bright-spot/">ad revenue plunged 70 percent</a> over 10 years in the decade leading up to 2011, according to Poynter. Thankfully you can still find all of that stuff on Craigslist.
The days of waiting for a letter from a loved one (or lover) are long gone. Don't believe us? The agency responsible for carrying those letters has <a href="http://www.huffingtonpost.com/2012/07/16/going-postal-what-would-a_n_1677892.html">been on the financial edge for months</a>. You can thank email, scanners, the cloud etc. for that.
Bar soap sales have <a href="http://www.startribune.com/business/yourmoney/127246443.html?refer=y">dropped 85 percent</a> over the past 20 years, according to the Minneapolis Star Tribune, largely because Americans are starting to believe bars are less hygienic than gels or body wash.
With CDs, USB drives, the cloud and countless other ways to transfer information on your computer, floppy disks have gone out of fashion. But don't worry, there are still many uses for square data holders -- you could <a href="http://www.huffingtonpost.com/2012/10/09/craft-of-the-day-floppy-disk-planters_n_1951187.html">turn them into vases</a> for example.
As consumers become more concerned with using environmentally-friendly containers, <a href="http://www.startribune.com/lifestyle/blogs/127299188.html">traditional bottled water</a> may soon be on its way out, according to the Minneapolis Star-Tribune. Coca-Cola and Pepsi, which both make bottled water, are already trying to use less plastic in their bottles.
Stick Shift Cars
As cars with automatic transmissions are becoming cheaper and more fuel efficient, the reasons to buy a stick shift <a href="http://content.usatoday.com/communities/driveon/post/2010/07/stick-shift-death-watch-automatics-costing-less-better-mpg/1#.UOYI5Injlsl">car are disappearing</a>, according to USA Today. Soon engaging the clutch could be a thing of the past.
With Wikipedia and countless other internet sources available for looking up useful (and useless) information, encyclopedias are soon to be forever enshrined as an item on your grandmother's bookshelf. The proof: Encyclopedia Britannica announced in March that it <a href="http://www.huffingtonpost.com/2012/03/13/encyclopaedia-britannica-online_n_1343263.html">would be stopping its print edition</a>.
We can't say we'll miss this one too much. With email and scanners, the fax machine will thankfully soon just be a <a href="http://www.guardian.co.uk/technology/2009/jul/14/fax-machine-mia-farrow">subject of office lore</a>.