Who would Buy RIM?

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As Research in Motion (RIM) continues to spin downward, the question becomes: Who would buy it, and why? More information on the company's options might be released and/or leak out at its annual general meeting on July 12.

Since BlackBerry 10 (BB10) won't be out until the first quarter of 2013 -- assuming the company can hit that date without further delays -- continued declines in sales revenue and market share are pretty much a done deal through at least the end of the year.   If you're a buyer, you've got an advantage because tech and financial analysts are beating up on RIM and there's no way the company can pull a rabbit out of its hat.

Breaking up RIM into pieces seems to be the working theory at the moment, with the hardware, operating system, server software, apps store, mobile/cloud management services and patents all being potential assets.   Anyone acquiring the company would likely shutdown and/or shed parts, but what is of true value?

At the top of the list has to be patents. The company is part of a consortium that bought Nortel's patents. With an investment of $779 million into the consortium and Blackberry's native patents, there's quite a bit of intellectual property (IP) to make lawyers drool. Since there is no clear end to patent feuds on the horizon, RIM’s patent portfolio would be worth serious cash to anyone stockpiling IP.

Services combined with the existing customer base would rank second, but the customer base is shrinking and will continue to do so since most people aren't going put off purchases until BB10 shows up. A lot of individual purchasers are already self-migrating to Apple and Android platforms, with corporate and government clients moving to more flexible (i.e. more available apps) smartphones as well. There are also some ongoing questions about the value of RIM services given the company's track record of multi-day outages.

BlackBerry hardware and operating system are pretty much doomed. If HP couldn't make Palm's OS work and Nokia ending up being a de facto OEM for Windows Phone, there's little to suggest that BlackBerry's operating system has long-term viability as a niche player. Part of BlackBerry's image was being the hip device, but it lost that credential with the arrival of the Apple iPhone and hasn't been able to regain that status.

The biggest question is if RIM leadership will try to do a deal or stick it out.  I'm not sure if RIM has enough boldness in its executive management to try to cut a deal before the company loses significantly more shareholder value.




Edited by Brooke Neuman
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