As the layoffs have begun, RIM has reportedly hired JP Morgan and RBC Capital to look at “strategic options” according to Reuters, and among the ideas that came out it, RIM may have been advised to split its business in half, by separating the handset division and the messaging network division. It is fair to say that the messaging division would be seen as the one with more value, while the handset part would be left to fend off for itself, with possibly opening up to more operating systems, be sold – or more likely… die.
Can RIM’s handset division be bought by Microsoft? (No)
The analysis by those financial firms is more optimistic than this of course, and it is suggested that someone (like Microsoft?) may buy the struggling handset maker, but this is a pipe dream. If a company like Microsoft really wants to build a smartphone, it would not need to buy RIM’s handset division. It already has the internal hardware and software design teams to do that (look at their home-designed Surface), and the manufacturing can be handled by Compal, Hon Hai, Flextronics and other Asian manufacturing contractors. Celestica, the BlackBerry contract manufacturer has started to decrease production. Reuters mentions that Amazon or Facebook may also be candidates for a potential buy. Even Oracle was rumored to be on the list at some point.
Would the messaging service prosper on its own?
The story is not so rosy for the RIM messaging division either: without the blackberry handsets that are *awesome* for messaging, it is very likely that the RIM messaging usage will drop as well, making any acquisition a dangerous short term venture at best. Any third party that wants to buy that business is better off waiting for a deep discount or for a “fire sale” because it can only end up as being an “ultra-secure messaging” niche market if it is separated from the BlackBerry handset business.
To survive, RIM must keep it together and perform
Ultimately, the best course of action for RIM is to keep it together, and to come out with something successful with BlackBerry 10 as one company – easier said than done, right? While all these “secondary options” aren’t very attractive to the consumers (you and I), that’s because they are actually designed to get the best possible value for the shareholders.
With a split, RIM would “pull a Palm”
If RIM ever has to do this, they would effectively take Palm’s road to hell, and we all know how this ended. The RIM messaging platform is strong because it had a great synergy with potent hardware to do the job. Opening up the hardware to other OSes will be very difficult because RIM doesn’t compete well outside of the “physical keyboard” play (note that RIM is reportedly leaving the keyboard out of its first device, subsequent handsets will feature a keyboard). Opening up the messaging service to new players won’t save RIM because no-one else has ever produced a better texting hardware. BlackBerry 10 is RIM’s last chance.
Related: overview of Palm’s news headlines.
- 2013-07-11 Research In Motion Officially Renamed To Blackberry, As Per Shareholder Vote
- 2013-02-04 BlackBerry Z10 Review
- 2013-01-30 BlackBerry Z10 Review Sentiment
- 2013-01-30 BlackBerry 10 Launched, RIM's Roadmap for 2013
- 2013-01-30 BlackBerry Z10 Announced
- 2011-08-22 RIM Drops Another 3% In Market Share [NPD Research]
- 2011-05-02 BlackBerry Balance to balance work and play on your BlackBerry phones