BlackBerry Picking: Who Should Scoop Up RIM?
“RIM, You’re Done Here.” “Alas, poor RIM and BlackBerry, we knew them well.” The recent headlines regarding the one-time smartphone king read like obits, and the falling-sky rhetoric certainly isn’t out of bounds. BlackBerry’s market share continues to slide at the hands of Android and iOS, and recent reports claim that the company has drastically cut the sales target for its undercooked PlayBook tablet and cancelled plans for a 10-inch version. No wonder the stock has plummeted 55 percent this year. Can anyone come to RIM’s rescue?
A recent Bloomberg report claimed that a buyer could pay a 50-percent premium over RIM’s sagging share price and still get a good deal. Some analysts claim that buying any company in such a state of decline is insane. But that hasn’t stopped Microsoft and Dell from emerging as potential frontrunners. Other names have popped up, too, including Cisco, HTC, IBM, Samsung, and even HP.
So who should scoop up RIM? Let’s break down the chances of these companies stepping up to the plate.
Acquisition Chances: 10 percent
On paper, nabbing RIM would strengthen Cisco’s appeal to potential clients, enabling the company to provide an end-to-end solution for networking and mobile communications. Having BlackBerry in its portfolio could also give Cisco a nice one-two punch with its upcoming Cius tablet. However, this company ditched Flip for a reason. Selling products to consumers is not a core competency, even if its business includes gadgets with cross-over appeal.
Acquisition Chances: 50 percent
Let’s be honest here. Dell’s mobile efforts have sputtered thus far. The company made a valiant attempt with the original Streak and subsequent Android phones and tablets, but they went nowhere with consumers. Part of the issue is that Dell hasn’t had much luck getting carriers to promote its wares, with its handsets either getting little or no push behind them or just outright being ignored. RIM gives Dell an in with mobile operators and a platform that’s very attractive to the same business customers Dell courts every day with other products. Dell would also be able to say, like HP and Apple, that it now owns the whole widget (hardware + software).
Acquisition Chances: 15 percent
There’s no denying that the PlayBook tablet’s interface looks uncannily similar to webOS, so much so that we couldn’t help but ask RIM back in March whether it had copied HP’s design. This was the response: “When you’re trying to optimize user experience that juggles multiple apps open at once and on a small screen, you’re going to get people landing on similar kinds of designs.” Well, if RIM and HP are following a similar path, maybe they should just get together. I’d argue that RIM’s QNX OS is more stable and responsive, but webOS’ interface is more thoughtfully designed. By joining forces, HP could potentially accelerate its mobile strategy while satisfying the security needs of its many business customers. Talk about Synergy.
Acquisition Chances: 30 percent
Don’t be so quick to write off this idea. While HTC has poured a ton of resources into its Sense software for Android devices—and has been wildly successful doing so—the company is not fully in control of its own destiny. It must rely on Google to supply the base OS, which it then customizes. The HTC Status, which lets users leverage Facebook in new ways, is just the latest example of what the company can do.
But Android is only so open, and HTC has been unable to flex its creative muscles on Windows Phone 7 devices. By buying RIM outright, we suspect HTC would work magic with the QNX platform that powers the PlayBook tablet. Maybe HTC will branch out with its own OS at some point, but acquiring RIM could provide an intriguing and compelling shortcut, allowing the company to continue to focus on interface design while fully owning the software and hardware it creates.
Acquisition Chances: 5 percent
One columnist writing for the financial news and analysis site Benzinga is so confident that RIM and IBM are a perfect match that he declared that IBM is the only company that should buy the BlackBerry maker. His reasoning? “IBM’s culture should be much more compatible with RIM than any other potential acquirers. More importantly, IBM can acquire RIM for its strong bonds with enterprises, and forget about the continual competition with Apple and Google in the consumer market.” The problem with this reasoning is that users don’t want to carry business-only devices. It’s exactly because iOS and Android are infiltrating the IT departments that RIM is losing.
Acquisition Chances: 0 percent
When the recent acquisition rumors started heating up, one
chief investment officer based in Toronto—who oversees RIM shares—said owning BlackBerry would give Microsoft a nice complement to Windows Phone 7 and build its share. The latter part is true, but Microsoft has too much riding on WP7—including a strategic partnership with Nokia—to divert its focus. To me, it sounds just like wishful thinking from people hoping to resuscitate RIM’s stock. Next.
Acquisition Chances: 15 percent
Hey, BlackBerry is better than bada. Don’t know what that is? It’s the name of Samsung’s homegrown mobile OS that’s not designed to compete with other major smartphone platforms but rather to turn “conventional customers into smartphone users by providing cost-effective smartphones.” Last time I checked, you could get Android phones for free on contract. Like HTC, Samsung has enjoyed a big growth spurt thanks to Google’s OS, but as the company grows more ambitious, it could scoop up RIM and have a platform with a much bigger install base all to its own. Still, I don’t think the consumer-focused Samsung has much interest in acquiring a company with such deep roots in the enterprise.