RIM was one of the most profitable and successful phone makers merely five years ago. In the past two years, the growing and consistent competition from Google’s Android and Apple’s iOS, have pushed the corporate phone maker down the success ladder. Moreover, RIM hasn’t been able to keep up with the fast pace technological advancement due to frequent delays in its new offerings. RIM’s investor confidence has been crashing and so are its stock prices. There are several strategies that RIM can adopt to resurrect its position and stature and the one that is being most talked about is the possibility of the acquisition of the mobile phone manufacturer.
Who will buy RIM?
The Firemex blog opines that despite the harsh media coverage, experts acknowledge that RIM still retains value and should not be overlooked as a strategic acquisition target. RIM has built its market value successfully in the enterprise sector. Considering the most conservative estimates, RIM’s enterprise value is estimated to be about $4.2 billion. Its email and BBM service is worth $1.6 billion, and patents between $1 to $4 billion. Its enterprise user base stretches upto 20 million.
The blog has also pointed out some players who could be potential buyers of RIM, such as Facebook, Google, Apple, Amazon, Microsoft, HTC and Nokia. It has also stated why these companies could possibly buy RIM. Facebook could buy it to finally come up with its own brand of successful Facebook-enabled phones, Google to increase its access in the enterprise market and gain more patents, Amazon to compete in the mobile space, Nokia to improve its weak smartphone offering, and HTC to become bigger with RIM’s market share and enterprise security. The blog also brings out the difficulties these companies may face in acquiring RIM. For instance, HTC is a small company and managing finance for such a huge buyout may be difficult. Google and Apple would face several integration concerns.
RIM was termed the most profitable company in Canada in 2007. In the year 2008, after the launch of Android, its position began to dwindle. In 2008, its Blackberry Storm received poor reviews and so did the Blackberry Torch in 2010. The new Blackberry OS just didn’t make it to the market in time. The Blackberry 10 has also been delayed for a long time now.
Recently, a northern California jury has directed Research in Motion Ltd to pay $147.2 million in patent litigation over a remote management system for wireless devices. The verdict announced on Friday in a San Francisco federal court comes at a bad time for RIM, whose stocks have fallen by more than 70 percent in the past year as customers abandon the BlackBerry in favour of Apple's iPhone and a slew of devices using Google Inc's Android software. Amar Thakur, an attorney for Mformation, said the jury directed RIM to pay an $8 royalty for every BlackBerry device connected to RIM's enterprise server software, which brings the total award to $147.2 million. The verdict only covers U.S. sales through trial, Thakur said, and not future or foreign damages.