Reports: IBM Mulling RIM Enterprise Services?
Mark down IBM (NYSE: IBM) as the latest IT heavyweight to chew over a buying interest in Research in Motion (NASDAQ: RIMM), according to reports — this time for the mobile maker’s enterprise services unit, the part of RIM’s business that runs the server network used by BlackBerrys for email and messaging.
It marks the second time in less than a week that word, albeit still unsubstantiated, has surfaced about potential RIM teammates. As the mobile maker attempts to regroup after a disastrous start to its fiscal year, are these the first drops of rain before the storm or merely a front passing through? Let’s examine the signs:
Published reports characterize discussions between IBM and RIM to this point as informal, with IBM said to be uninterested in buying RIM in its entirety or in procuring the division that makes phones. According to one report, Berenberg Bank has valued RIM’s enterprise services business as high as $2.5 billion but others have pegged it lower, noting the difficulty of splitting the intertwined hardware and enterprise businesses.
RIM’s board is said to have thus far snubbed IBM’s overtures, according to one account, instead opting to stick with its plan to see if the BlackBerry 10 operating platform — the arrival of which has been pushed back to early in 2013 from a planned pre-holiday season release — can breathe life into the vendor’s flagging performance.
In the wake of inroads made by Apple (NASDAQ: AAPL) and Google (NASDAQ: GOOG) into RIM’s customer base, the company has lost a substantial amount of IT real estate. In Q1 2013, RIM lost some $518 million on sales of $2.8 billion, a 33 percent downturn from the previous quarter when it lost $125 million on sales of $4.2 billion. The net-net is a workforce slashing of 5,000 jobs. Even The VAR Guy is at a loss for sage advice to offer RIM’s turnaround hopefuls.
RIM CEO Thorsten Heins has publicly floated options such as partnering with another vendor or licensing the mobile maker’s software to others rather than pursuing an outright sale — perhaps prompting, by inference, a flurry of stories identifying potential mates.
Indeed, late last week, Samsung denied a report that it was interested in buying BlackBerry 10 licenses, as initially reported by AllThingsD in referencing a note by Peter Misek, a Jefferies & Co. analyst. Reports of Samsung’s RIM curiosity initially surfaced last January and again in March.
Even with a successful launch of BlackBerry 10, RIM will be climbing uphill to regain ground lost to Apple’s iOS and Google’s Android, which together account for some 85 percent of the global smartphone market, according to IDC’s latest figures for Q2 2012. BlackBerry owns but a 4.8 percent share, a 41 percent slide from the same time last year.
To revive itself, RIM will have to attract to the new BlackBerry 10 platform developers who have flocked to the more popular iOS and Android. And, channel partners’ interest in selling licenses will need to perk up. Hoping to offer more serious competition to Apple’s iPad, RIM earlier this month rolled out a new 4G-ready model of the BlackBerry PlayBook.
While it’s difficult to say which boulevard to higher ground RIM will pursue, it seems clear that there’s more jockeying to come between now and BlackBerry 10’s appearance.