What Will RIM Do Now?

Posted Apr 1, 2012

The new CEO of Research In Motion may have taken a bite more of what he can chew. There are a limited number of options he has as the leader of RIM. He can try to turn the company around by doing something drastic or try to find a buyer that can do a better job than him. The problem with RIM right now is that their business is in decline.

RIM said that the sales of BlackBerrys had fallen shortly in the latest quarter. The subscriber growth has hit an all-time low of 3%. Several of the company’s top executives have stepped down. Former RIM chief technology officer David Yach said that RIM was somber during a dinner meeting between RIM, chief information officers from various companies, and government agencies. RIM CEO Thorsten Heins said that the company is still planning on rolling out BlackBerry smartphones later this year.

RIM’s market capitalization is over $7 billion so there are a few number of buyers at that price. Supposedly Microsoft and Nokia both explored a joint bid for RIM last year. If they had won the bid, most likely Microsoft would scrap the BlackBerry operating system and would integrate Windows Phone into the company.

Another option that worked for Motorola was putting their intellectual property up for sale. The limitation with that option is that the Canadian government requires that foreign companies demonstrate a “net benefit” to Canada in a big takeover deal.