Each week seems to bring a new rumour about Research in Motion. Yesterday, Boy Genius Report cited an anonymous source claiming RIM co-CEO Jim Balsillie is “going hard after Samsung,” trying to get the electronics manufacturer to buy a portion or all of the company, or to license RIM’s software. A spokesperson from Samsung later told Reuters that the company has not considered buying RIM, nor is it interested in doing so.
The rumours continue today with another Reuters report quoting an anonymous source from an unnamed Asian smartphone company saying RIM is “an attractive option to look into and we’re flexible about anything.” It’s unclear from the article whether the source was referring to an outright purchase of the company, but the article nevertheless ran with the headline “RIM may find an Asian buyer yet” in the Financial Post.
The rumours that RIM is considering licensing its software aren’t that far-fetched; doing so would help handset makers such as Samsung and HTC lessen their dependence on Google’s Android operating system, and provide a new revenue stream for RIM. But to think that RIM is pushing for a sale stretches plausibility for a number of reasons, not the least of which is the difficulty in imagining Balsillie and co-CEO Mike Lazaridis actively pursuing such a move.
I have a feature about RIM in the issue of Canadian Business hitting newsstands tomorrow, and I spent some time talking to former employees who have insight into how the two of them operate. Both were portrayed as incredibly dedicated individuals who believe in RIM’s ability to best its competitors, and in their own abilities to run the company. To sell off the whole thing at this point is to admit defeat. Given their drive and the remarkable success they’ve achieved since the BlackBerry debuted, it seems unlikely either Balsillie or Lazaridis would be willing to throw in the towel. Indeed, the Wall Street Journal reported in December that the company rejected takeover offers from Amazon last year.
They have also essentially staked their futures on the new line of BlackBerry 10 smartphones to be released later this year. These are the devices both have promised will be better than anything the competition has. (Surely they’d want to stick around for that.) RIM has been working toward these smartphones since at least April 2010, when it purchased QNX Software Systems with the intention of using the company’s software to power the next generation of BlackBerry devices. Any potential acquirer will be reluctant to scoop up RIM when is still undergoing a difficult and prolonged platform transition.
But everything could change if these smartphones fail to reverse RIM’s market share declines in the U.S. In an earnings call in December, the company acknowledged its U.S. business was “particularly weak.” Most of the investor concern is centered on this market, and calls for the company to take drastic action will only intensify if RIM’s position there deteriorates further.
For now, however, RIM has roughly $1 billion in cash, a sizable pool of talent, and a growing subscriber base. All of which is to say it still has a lot of fight left in it.