RIM in Talks with External Advisors, May Be Considering Shift in Strategy

By Beecher Tuttle April 16, 2012

Coming off yet another disappointing quarterly performance, Research in Motion (RIM) may finally be considering adopting a more radical business strategy. Sources told Bloomberg on Monday that the Canadian phone maker is in talks with at least two financial institutions that have experience advising companies through a strategic review process.

Although RIM CEO Thorsten Heins said last month that a potential sale wasn't the "main direction" that he is considering, sources told Bloomberg that the company's willingness to reach out to third party advisors implies that the RIM's new leadership is at least mulling over the idea of taking on a partner or being sold outright.

Heins said last month that RIM would consider any number of new strategies, including licensing, joint ventures and partnerships.

"It is difficult to say at this point in time what kinds of opportunities may surface throughout this strategic review process, but we intend to keep you updated, where possible, as we progress through this exercise," Heins said, according to Bloomberg.

Interestingly, the report comes just two days after news broke that Heins' predecessor, former RIM co-chief executive Jim Balsillie, was considering a major change in strategy before he and fellow CEO Mike Lazaridis stepped down in January.

Reuters reports that Balsillie was working on a plan that would have allowed U.S. and European carriers that support non-Blackberry devices to route data traffic through RIM's proprietary network.

The end goal would be to help carriers encourage users to upgrade to entry-level smartphone plans by offering less expensive data services. Essentially, RIM would be leasing out its network to customers who have no real interest or means to purchase a Blackberry device. However, talks with the carriers soon fizzled due to a discord at the executive level of RIM, Reuters reports.

With its average quarterly revenue and stock price plummeting each month, RIM needs to make a strategic change at some point soon. The company booked a net loss of $125 million in the most recent fiscal quarter as its profit dropped to $418 million, or 80 cents a share, from $934 million in the previous year's Q4. Revenue slumped to $4.19 billion from $5.56 billion.

Even with its meager track record of late, RIM missed its earnings expectations of 81 cents per share on revenue of $4.54 million




Edited by Rich Steeves

TechZone360 Contributor

SHARE THIS ARTICLE
Related Articles

Avaya Files Chapter 11, Plans Restructuring

By: Steve Anderson    1/20/2017

Avaya turns to Chapter 11 bankruptcy in a bid to make some key changes and attempt to recover for the future.

Read More

Reports of the Death of the Deskphone are Premature; Allworx Says We're on the Verge of a Deskphone Revolution

By: Erik Linask    1/19/2017

We've heard commentary about the death of the deskphone for several years now. Yet, if you look on most corporate desktops, you'll still find one. The…

Read More

Microsoft Makes AI Moves in Montreal

By: Alicia Young    1/19/2017

Recently, Microsoft has shown a growing interest in Montreal's booming artificial intelligence (AI) presence. This has spurred a series of acquisition…

Read More

What to Do About Netflix Shares

By: Steve Anderson    1/19/2017

Netflix has destroyed all estimates about its share prices, but how should investors respond?

Read More

The End of Work as We Know It: 6 Big Predictions for 2017

By: Farrell Hough    1/19/2017

The future of work in 2017 and beyond will center on using increasingly capable technologies to improve our productivity to the point where we can foc…

Read More