Microsoft, Nokia Wouldn't Have Benefited From Acquiring RIM

 
 
By Nicholas Kolakowski  |  Posted 2011-12-22 Print this article Print
 
 
 
 
 
 
 

NEWS ANALYSIS: Microsoft and Nokia are rumored to have considered a bid for RIM. The upside of such a deal would have been minimal.

Microsoft and Nokia apparently played with the idea of purchasing Research In Motion, according to a recent piece in The Wall Street Journal.

That report quoted unnamed "people familiar with the matter," who described the status of the talks as "unclear."

RIM's value to Microsoft and Nokia is arguable. Certainly, the Canadian phone maker boasts an immense library of patents, which could prove useful to any company seeking a little more intellectual-property protection. However, Microsoft and Nokia have both scored their own legal victories in the multi-front patent wars, suggesting their respective patent portfolios are more than adequate (at least right now) as defense.

Moreover, a RIM takeover would present significant drawbacks for both Microsoft and Nokia, committed as they are to Windows Phone. Nokia and Microsoft's other smartphone manufacturing partners already boast extensive hardware portfolios and proprietary design language, and RIM's BlackBerry line is primarily centered on devices with physical QWERTY keyboards, a feature antithetical to Windows Phone's focus on virtual keys and touch-based navigation. Merging RIM's ecosystem with that of Windows Phone would be an incredible mess. 

Microsoft is also making its own significant strides into cloud services and business mobility, lessening the potential benefit of seizing RIM's assets in those arenas.

RIM is pushing back against declining market share for its BlackBerry devices, paired with a dip in net income and year-over-year revenue. For the third quarter of its fiscal 2012, RIM reported revenue of $5.2 billion and net income of $265 million. BlackBerry subscribers increased 35 percent year-over-year, to 75 million.

During a Dec. 15 conference call, RIM co-CEO Jim Balsillie acknowledged the company's struggles. "We're in the process of completing the largest organizational and platform transition in the company's history," he told media and analysts. "We recognize our shareholders may feel we have fallen short." 

He also expressed dissatisfaction with RIM's performance in the United States, but suggested that a "comprehensive review of all aspects of the business" was underway. That review would apparently focus on areas including the RIM product portfolio, manufacturing, and research and development.

RIM's turnaround plan centers on an upcoming series of smartphones running a QNX-based operating system named BlackBerry 10. RIM executives have emphasized these devices' supposed ability to compete toe-to-toe against BlackBerry's highest-end rivals, although they have yet to share an exact release date beyond the latter half of 2012. BlackBerry 10 was formerly known as BBX, with RIM changing the name in the face of a brewing trademark battle with Basis International Ltd., which markets business software and also claims the "BBX" name.  

But a Dec. 22 posting by the blog Boy Genius Report, quoting an unnamed source with insight into RIM, suggested that BlackBerry 10 simply wasn't a "working product" yet. 

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Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.
 
 
 
 
 
 
 

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