RIM weighing Microsoft alliance, network sale options: Reuters
Struggling smartphone vendor, Research In Motion (RIM) is said to be looking at various options to get out of the mess in which it currently finds itself. Among the options being considered are a tie-up with Microsoft and even selling out its networks business to a private equity firm or a technology company, Reuters reports. The latter move would be suicidal and indicate the end of RIM while the former seems unlikely as CEO Thorstein Heins remains committed to BlackBerry 10 platform, which has already been delayed for more than a year and is expected to be released not before the first quarter of 2013.
Reuters is claiming Microsoft CEO Steve Ballmer had approached RIM a few months ago to form an alliance for its Windows Phone 8 platform similar to one it has with Nokia. This option would also enable RIM to get Microsoft to buy a stake in the company and also provide it with marketing support. Microsoft pays Nokia $250 million every quarter as ‘platform support fee’ to ensure that Nokia uses Windows Phone 8 as its primary smartphone platform.
The other option that the RIM board is considering is opening up or complete sale of its network business. However, selling the network would mean the end of BlackBerry smartphones as well, or in other words the end of RIM as a company. Former co-CEO Jim Balsillie had first mooted the plan to open its network to other players and license key RIM technology of securely delivering emails to mobile devices. However, the plan was rejected and Balsillie was booted from the company.
To achieve this end-game, RIM would first have to spin off its hardware business from the networks business and then look at buyers for both. This move has been rumored for a while. Eventually it all boils down to time RIM takes to ship BlackBerry 10. RIM’s stock went down by 17 percent after yesterday’s earnings report and its market cap now is slightly over $4.1 billion. All eyes are now set to see what happens first – does it ship BlackBerry 10 or the management act on one of the options they have to get the maximum value for the company and make an exit.