RIM’s Impending Collapse – Sometimes I Hate it When I’m Right – Part 2

With its stock at an all-time low, the Ontario-based company has retained JP Morgan-Chase to help it evaluate its options

Sometimes I really hate it when I’m right. I really do…

Last time, I outlined how and why RIM retained JP Morgan-Chase to help it find a buyer for its corporate assets.  We spoke specifically about who would be good and likely candidates – Google, Microsoft and Apple topped the list.

I covered why both Google and Microsoft wouldn’t be the best candidates for the acquisition.  Let’s take a look at Apple as a viable candidate. It’s a pretty compelling scenario, even if I do say so myself, though it wouldn’t be without its own regulatory challenges…

If you think about it, a marriage between Apple and RIM brings up some very interesting opportunities. It is, in my mind the best possible outcome of RIM retaining JP Morgan-Chase. Apple is one of the biggest leaders in the mobile computing space at this time.  They currently set the height of the bar that most everyone, RIM included, has been trying to top since the introduction of the iPhone in 2007. The iPhone is the sole reason why RIM introduced the Blackberry Storm and Storm 2.  Those devices failed miserably because they didn’t know what they wanted to be – members of a serious enterprise tool kit, or poorly constructed, me too imitation of the consumer-based iPhone.

As Apple currently licenses Exchange ActiveSync to insure that its corral of iDevices can sync with Exchange Servers around the world, the acquisition of RIM’s push email patents could give Apple the opportunity to immediately acquire up to 78M additional iPhone customers.  I don’t know a Blackberry user ANYWHERE that wouldn’t immediately drop kick their Blackberry for an iPhone if it instantly and immediately hooked into an existing BIS/BES infrastructure.

Apple has been chomping at the bit to make serious headway in the enterprise space.  Building RIM’s push mail system into iOS would immediately…IMMEDIATELY…do that for iPad and iPhone. It would give them more than a serious hand hold on the enterprise market, and open up sales of Apple desktop hardware as BIS/BES are reenvisioned, reinnovated and optimized for OS X Lion/Mountain Lion Server.

With RIM’s patents, Apple’s iOS could become the new enterprise standard for mobile computing, clearly the hottest, most growth potential sector of the computing market and industry for, perhaps, the rest of the decade.  The iPad is already the biggest selling tablet in the world, with Google’s Android playing a distant second.  The integration of RIM’s push into iOS could negate Apple’s need for an Exchange ActiveSync license, as BIS/BES already work and integrate with Exchange.  Changes to Apple’s desktop Mail client to further support the new patents would insure that they could become a clear choice at work.  Apple servers could become the clear choice for mobile implementations as they drive mail servers for the enterprise.

If this isn’t THE no-brainer of the century, I’m clearly missing something…and I’d love to have someone tell me what that might be.

Now… would someone do me a HUGE favor and forward me Tim Cook’s phone number?  I’d really like to give him a call and encourage him to run after this…

Anyone..?  Anyone..?

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RIM’s Impending Collapse – Sometimes I Hate it When I’m Right

With its stock at an all time low, the Ontario-based company has retained JP Morgan-Chase to help it evaluate its options

Sometimes I really hate it when I’m right. I really do…

Late last year, I pumped out a couple columns on why I thought 2012 was going to be a very, VERY difficult year for RIM. They’ve got a huge set of hurdles to overcome. With layoffs likely to happen at any time between now and the end of the year, employees who aren’t actively looking for new employment are likely setting themselves up for huge problems later on. When a company is tanking, its always better to leave earlier rather than later in my opinion.

Be that as it may, about a week ago, it was reported on Wall Street that RIM has retained JP Morgan-Chase to help it figure out what to do with itself. There’s really only one reason why RIM would hire an investment bank the likes of JP Morgan-Chase – they’re actively looking to shop the company, wanting to identify a buyer sooner rather than later while the company’s stock and assets still have value.

I saw an article on Seeking Alpha that identified three real world players to purchase all or part of RIM or its patent portfolio: Microsoft, Google or Apple. The article’s author, identified only as “kracken,” is correct. There are only three. Some people may wonder about companies like Nokia, Samsung, LG and HTC. The fit isn’t right there.

Nokia, Samsung, LG and HTC are handset makers that play in ecosystems created by Microsoft (Windows Phone), Google (Android) and Apple (iOS). For Nokia, Samsung and the rest to make a play for RIM would mean that they would be interested in throwing considerable capital behind the continuation and evolution of BB10/QNX, and the rest of RIM’s ecosystem, which includes the pitifully received Blackberry Playbook. Even though version 2.0 of the tablet’s OS was fairly well received, its highly unlikely to make an appearance ANYWHERE with any kind of impact that would make it worthwhile to have.

RIM currently has $2.1B in cash and over 78M known Blackberry users worldwide. However, only 20M of those are enterprise level users. With 58M consumer-based users that could jump off the RIM ecosystem for a more viable one in MS, Google or Apple, its clear where RIM’s current value currently lies – its patents.

With Google’s recent acquisition of Motorola Mobility recently completed, its unlikely that regulators would approve the additional acquisition of a set of patents that would likely, and most certainly, create a near total monopoly for Google in the mobility space.

Microsoft is perhaps the second most likely candidate in the list of three, some may think.. As a former, direct RIM opponent in the Push eMail space, it would be very ironic for MS to acquire the RIM Push mail patents (as well as others) when, during the 2002-2004 timeframe, if memory serves correctly, RIM brought litigation against Microsoft for the way Exchange ActiveSync pushed mail and notifications out to a connected device. MS had to change the way Exchange ActiveSync worked, much to the dislike of many. Acquiring the patent would certainly close the loop for MS is that story, but with Microsoft’s flat stock performance over the last 10 or so years, I’m not entirely certain what the acquisition would truly buy them other than a sense of vindication. They’ve already “won the war,” especially if they do, in fact, end up taking 20 or so percent of the mobile market by 2016, as predicted by some analysts. Apple and Google already license Exchange ActiveSync as the back end of both’s abilities to sync with Exchange Servers for mail services. There’s no reason for them to purchase patents for a competing push service when no one else is likely to use it.

From my perspective, the only reason why MS would buy them would be to kill them.

Come back next time, and I’ll finish up the analysis…

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RIM turned down acquisitions overtures from Amazon, Microsoft AND Nokia?

RIM is headed for a very difficult 2012. It seems that it can’t even GIVE it away…

Case in point – RIM has been a huge player in the PDA/Smartphone market for more than 10 years. Its closer to 15, really; but not quite. Anyway, in 2011, it was stated that RIM’s stock lost 75% of their value, and while that loss still leaves them with well over $1.7B in cash, it’s not clear how long that cash will last when they are constantly losing market share to both Apple and Google’s Android. Big decisions need to be made, and made quickly.

One thing is very clear, however – RIM needs to get their act together…quickly.

One thing that really puzzles me is that RIM has turned down acquisition overtures from a number of really big players in the tablet and smartphone markets, including both Amazon and Nokia. They seem to have scared off Microsoft and their interest in the Ontario handset manufacturer more than once. They also don’t seem to care. Their co-CEO’s appear hell bent on trying to right the company. While I applaud them for their tenacity, they really just need to knock it off. The party’s over.

Not only is the party over, but the the BGR reported rumor that sparked a 7% uptick in the company’s stock on 17-Jan-12, has been emphatically denied by Samsung. They have CLEARLY stated they have NO interest in RIM, and have never considered or formally discussed any interest in them. At this point, I not only expect the market to give back yesterday’s ample gains, but for the company to lose additional value in the immediate future’s trading.

Nearly every industry pundit that I know of is predicting RIM’s future to be dismal at best. C|Net’s Buzz Out Loud podcast recent 2012 Prediction’s Show also spelled out a bleak to dismal 2012 for the once dominant RIM.

Everyone else can see it…why can’t they?

Any way you try to look at this, RIM needs to act, and act now if they are going to do save something, anything of themselves. The company lost 75% of its value in 2011…75%! It can’t stand to have that happened again. If their board is paying attention, much of the tech industry is chiming in on their rather pronounced misfortune, and they are making provision for that continued misfortune. Unfortunately, most everyone thinks we are past the water bailing point. According to the industry, the ship is going to sink. It’s just a matter of time, and it’s just a matter of determining how much value for their shareholders can be saved.

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