Why RIM Should Not Sell the BlackBerry Brand–and Why It Should
Recent rumors suggest tech heavies including Microsoft, Nokia and Amazon have all been courting RIM and considering a BlackBerry buyout. CIO.com's Al Sacco offers up two simple reasons why RIM would be wise to resist such a takeover, as well as two more reasons the BlackBerry maker might be ripe for a sale.
By Al Sacco
Managing Editor, CIO
Rumors about a potential sale of BlackBerry-maker Research In Motion (RIM) have been circulating for months, due largely to the Canadian company’s ongoing struggles to retain its place in the competitive mobile market and compete with the likes of Apple, Google and others.
As a BlackBerry watcher and loyal RIM customer, I’ve always kept a close eye on the company and its options for the future. Whether or not you believe the most recent BlackBerry buyout rumors, one thing about the BlackBerry maker is crystal clear: RIM is in trouble and some drastic changes are in order if the company hopes to ever regain a semblance of the success it had in the mid-to-late 2000s–and an all-out BlackBerry buyout could potentially be in the cards for RIM.
What follows are two good reasons why RIM should refuse any BlackBerry buyout offers, and two reasons RIM might want to sell the BlackBerry brand post haste.
Why RIM Should Stay Its Course and Refuse a Buyout
The Potential Promise of BlackBerry 10
RIM is about to roll out a brand new smartphone OS, which could potentially reignite consumer interest in the brand. If–and it’s a big If–RIM is able to successfully steal consumer attention away from Apple and Google and eventually woo enough developers to start building an impressive app catalogue for BlackBerry 10, the OS launch could breathe new life into the Canadian company.
RIM could also potentially license BlackBerry 10 or other future BlackBerry software to additional hardware manufacturers, if it’s able to convince those manufactures that consumers really want BlackBerry software. Right now, it doesn’t really make sense for device makers to license RIM’s software since consumer demand for it is diminishing. But a successful BlackBerry 10 launch could turn the tables.
It’s possible that BlackBerry 10 could be the stepping stone RIM needs to get back on track, and as such, it makes sense for RIM to resist buyout offers and focus on making BlackBerry 10 a success.
RIM and the Enterprise
RIM still has a strong foothold in the enterprise, which is nothing to scoff at; businesses spend big bucks on enterprise mobility software, and RIM’s BES is still a solid source of income for the BlackBerry maker.
Enterprises, unlike consumers, are far less emotional and spontaneous when it comes to mobile devices and software, so organizations, particularly large ones, are less likely to jump ship on RIM without serious consideration. And many of these organizations are comfortable with RIM products and have already invested mucho dinero in RIM software and services, and in training staffers on that software.
To capitalize on this, RIM plans to unveil a new device management product in 2012, called BlackBerry Mobile Fusion, which will allow IT administrators to manage not just BlackBerry devices, but also Google Android and Apple iOS smartphones and tablets. With BlackBerry Mobile Fusion, RIM is acknowledging that other devices and mobile platforms are here to stay in the business world, and it’s doing its best to help customers support these new devices with familiar software–and keep them as RIM customers.
RIM could even decide to focus completely or nearly completely on the business market, where it has been most successful in the past. And RIM’s grip on the enterprise could actually strengthen in the coming year or two. RIM is a major player in the business world and it is still bringing in significant revenue on sales of enterprise software, with potential to grow that business. Hence, a BlackBerry buyout in the near future may not be necessary for RIM.
Why RIM Should Accept a Buyout Offer Right Now
RIM’s Value is Dropping…But It’s Still Worth a Bundle
RIM’s stock is literally and figuratively dropping. In fact, RIM’s overall market value has plummeted during the past year by more than 75 percent, down to about $6.8 billion, according to Reuters. (RIM’s stock actually went up for one of the first times in recent memory on the rumors of a potential buyout.) And customer demand, at least in the key North American market, is at an all-time low.
But nearly $7 billion is still a heck of a lot of scratch–some analysts estimate that RIM could bring in as much as $8 billion in a BlackBerry buyout.
A number of RIM shareholders have already called for a sale of the company, including Jaguar Financial Corp. So it’s starting to look like a good idea for RIM to accept a buyout offer while its market value is still somewhat healthy.
RIM Leaders Have Their Heads in the Sand
RIM leadership seems unable to accept or admit just how bad things have gotten for the company, and this is particularly troubling.
RIM needs a serious strategic shift if it’s going to get back in the game, and its current chief executives, Mike Lazaridis and Jim Balsillie, have demonstrated time and again that they’re not the men to lead this charge. The executives have tried to appease frustrated shareholders and employees with promises that things will change, but those promises never seem to come to fruition; RIM still appears to making the same mistakes that dragged it from grace in the first place.
In my opinion, one of RIM’s most significant downfalls right now is its inability to get new products to market in a reasonable timeframe. The last couple of years have been a vicious cycle that typically starts with a contrived and underwhelming product announcement, often made to maintain the appearance that RIM is “keeping up” with the competition. Then come months of waiting for said product. Eventually, a premature release of a half-baked product arrives, and gets panned by reviewers and critics because it’s buggy or unfinished.
And RIM’s BlackBerry 10 launch, arguably RIM’s most important product launch ever, is starting to look just like another example of this nasty cycle: The software was announced months ago at RIM’s BlackBerry Developer Conference; RIM’s CEO promised the first BlackBerry 10 smartphone in the “not so distant future;” RIM announced major BlackBerry 10 delays last week, etc., etc.
It’s difficult to have faith in the men in the driver’s seat at RIM, and since its board of directors seems set on letting Lazaridis and Balsillie remain behind the wheel until RIM either rights itself or crashes and burns, it could be a good idea for RIM to sell itself off before the bottom falls out.
Al Sacco was a journalist, blogger and editor who covers the fast-paced mobile beat for CIO.com and IDG Enterprise, with a focus on wearable tech, smartphones and tablet PCs. Al managed CIO.com writers and contributors, covered news, and shared insightful expert analysis of key industry happenings. He also wrote a wide variety of tutorials and how-tos to help readers get the most out of their gadgets, and regularly offered up recommendations on software for a number of mobile platforms. Al resides in Boston and is a passionate reader, traveler, beer lover, film buff and Red Sox fan.