Motorola Buyout Means Big Bucks for RIM

Analysts say Google’s deal to acquire Motorola Mobility may benefit Research in Motion by making its patents look even more attractive to outside companies, giving a boost to the beleaguered BlackBerry maker.

Google on Monday announced it bought Motorola Mobility for $12.5 billion, a move that gives Google a smartphone hardware presence and should also bring it thousands of new patents.

Meanwhile, RIM, which makes the BlackBerry smartphones, has been struggling because it is losing sales to Apple and Google’s Android phones.

Since Google is boosting its portfolio by thousands of patents through the Motorola purchase if regulators approve it, other companies may look to do the same and may eye RIM’s patents as a valuable asset to acquire.

RIM’s patents, which centre around mobile data synchronisation, could be worth billions, say financial analysts. National Bank Financial analyst Kris Thompson told Reuters said RIM’s patents alone could be worth $10 billion, and he has upped his rating to “sector perform” from “underperform.”

Meanwhile, Mike Abramsky, analyst at RBC Capital Markets, told Reuters the patents could be worth up to $6 billion, but he warned Google is paying to neutralize “a direct threat,” and “it is unclear if other buyers would be equally motivated.”

After Google’s announcement Monday, investors also appeared to support the notion of a possible RIM sale in the future. RIM’s shares Monday climbed 9 per cent to a price of $26.78 a share on the Nasdaq, according to Market Watch. The surge was a change for RIM, whose stock is down almost 60 per cent for the year.

While RIM’s patents are worth millions, its phones and OS capabilities may also attract companies who want hardware to add to their software offerings. For example, Microsoft has been attempting to make inroads into the smartphone market, and could shore up its corporate portfolio if it bought RIM and added its software to the still-popular BlackBerry devices.

While RIM sales have plummeted in recent years, many business executives still use BlackBerry units because they prefer the platform’s security strengths and encryption. Adding Microsoft’s e-mail and Internet software could be a huge attraction for business owners who want to sync their BlackBerry devices with their office computers.

However, a RIM sale may not come any time soon. The Canadian BlackBerry maker has been adamant about keeping the company, but if it can’t win back its dwindling customer base, it may have little choice than to accept the highest bidder it can find.

In addition to adding luster to RIM’s patent portfolio, Google’s buyout of Motorola may disrupt the market among many other Android phone makers. Samsung and LG have licensed Android but will now find themselves competing with Google-owned Motorola. Google on Monday said it intends to run Motorola as a separate company that will continue to develop Android devices while keeping Android an open platform for any manufacturer who chooses to use it.

This post originally appeared at Mobiledia.

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