Could Microsoft be the white knight needed to ride in and save RIM from the financial black hole it’s facing?
RIM (Research In Motion) hasn’t had a good week. To be fair the company hasn’t had a good week in the last year or more. But this was a particularly bad week for the Canadian company best known for its range of BlackBerry mobile devices. It announced a quarterly loss of $518 million, worse than anyone expected. This compares to the same quarter last year when the company reported profits of $695 million.
The company also announced another delay to its long-gestating BlackBerry 10 line of products (to a vague early-2013), which, combined with the losses, hit the share price hard. Over the past 12 months RIM’s stock has fallen by a whopping 70 percent. At this point RIM needs either a white knight to ride in and rescue it, or a miracle. Let’s assume the former is more likely.
According to Reuters, Microsoft could be RIM’s saving grace. One of the options being mulled over by the higher-ups at RIM is abandoning BlacBerry 10 altogether in favor of Windows Phone. Microsoft CEO Steve Ballmer has reportedly already approached the company seeking a similar deal to the one Redmond struck with Nokia.
For this to happen Microsoft would have to buy a sizable stake in RIM, which would effectively end the independence RIM currently enjoys. Which will make it a tough route to head down for those still committed to the future of RIM. But with BlackBerry 10 still months away the choices, and the time to decide on them, are running out.
It should be noted that a turnaround isn’t out of the question. After all both IBM and Apple have managed to climb out of the doldrums in their histories. Microsoft had a hand in both. Rim would be mad to not even consider a partnership.