Alternatively RIM may scrap handset business, turn to licensing services

With a disastrous quarter, which saw sales sink even lower than analysts' pessimistic predictions, time is running out for Research in Motion, Ltd.  Posting its second straight operating loss, RIM has committed to laying off approximately a third of its workforce.  Meanwhile share prices fell another 18 percent, marking a 70 percent slide in value for the year.  Share prices are at their lowest level since Sept. 2003.  Shares are priced at approximately 1/20th of their peak value in mid-2008.

A new Reuters report cites a source close to RIM, who shares a picture rich in confidential information on the pressure facing the embattled company's board.  The source claims that in recent months RIM has been approached by Microsoft Corp. (MSFT) CEO Steve Ballmer, who offered it financial assistance in exchange for ditching its upcoming QNX-based BlackBerry 10 operating system for Windows Phone.

RIM would then join Nokia Oyj. (HEX:NOK1V) as a second rehab project for Microsoft.

RIM board members are being forced to take the deal seriously, given that the BB10 release has now slipped to another half year away.  That means that it has taken RIM essentially three years to bring its new OS to the smartphone market, given that RIM purchased the relatively polished QNX in April 2010.

RIM Windows Phone 8
RIM is reportedly entertaining an offer from Microsoft to adopt Windows Phone 8.

Board members are reportedly resistant to the tie-up, though, given that it would mark the end of their company's independence.

The board is also considering a second, equally painful proposal to split the company's network business off and sell it to a private equity firm.  In many ways this marks the board returning to an idea of ex-CEO Jim Balsillie, who just before his ousting was exploring a plan to open RIM's secured email, messaging, and internet services up to third-party devices, such as Android smartphones.

But according to Reuters, such a plan might prove fatal to BB10 and the device business.

A final possibility would be to sell the company's wireless patent portfolio to Microsoft to try to scrounge up the cash needed to survive the BB10 delays and slumping sales.

But ultimately RIM may face a tough choice before the end of the year -- pledge fealty to Microsoft at the cost of independence, or scrap the handset business it worked so hard last decade to build.

Source: Reuters

"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay

Latest Blog Posts
T-Mobile Data Problems
Saimin Nidarson - Oct 20, 2016, 10:17 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki