Photo: Research In Motion
Research In Motion has hired bankers to “weigh strategic options,” Bloomberg reports.It seems like that’s all RIM does nowadays.
We don’t know what it means, but the stock shot up 4% on the news, so it looks like investors think it means it might be ready to sell itself.
The news was just a headline on a Bloomberg. We’ll get you more as we get it.
It’s worth noting that RIM said it was going to explore all options in its latest earnings release. Either this is the formalization of that process, or after a quick exploration, it may have just decided to try to sell the company.
Who would buy RIM? After another disaster of an earnings report, Henry Blodget suggested 11 companies desperate enough to take a look:
Samsung, HTC, LG, Motorola (Google), or Nokia: All of these smartphone makers are struggling for dominance in a fragmented market with low profit margins. In markets with low profit margins, especially “platform” markets like smartphones, market-share is a competitive advantage. All of these companies might look at RIM’s meaningful but dwindling share of the global smartphone market and conclude that it made sense to own.
Microsoft: Microsoft is about to throw a Hail Mary pass in the mobile market in the form of the new Windows Phone 7. Microsoft is nowhere in mobile. Owning RIM would not give Microsoft a commanding position in the market, by any means, but it would put it somewhere in the market. Also, RIM is strong in the enterprise, which is where Microsoft is strong. The combination of Microsoft and RIM might be able to argue persuasively that they’re a better choice for corporations than Apple or Android.
Facebook. Go ahead and laugh. Facebook’s working on its own Facebook phone. It needs this because Apple and Google currently control the gateways with which hundreds of millions (soon to be billions) of Internet users will access Facebook. Facebook is also about to have a market capitalisation of ~$100 billion. Facebook might conclude that RIM’s expertise and distribution would be nice things to own.
Amazon. Amazon already makes its own tablet–the Kindle Fire. Lots of people think Amazon will soon make its own smartphones. Amazon doesn’t care about building the state-of-the-art tablets. It just wants to make affordable tablets and smartphones aimed at the mass consumer market, gadgets that consumers can use to buy stuff from Amazon. Like any other acquirer, Amazon might want to blow up RIM’s proprietary platform and replace it with Android or Windows, but RIM’s gadget expertise and distribution expertise might be helpful.
Dell, HP, Acer, and other PC manufacturers who are getting absolutely clobbered because they’re not making hit smartphones and tablets. All of these companies might view RIM as a way of leap-frogging into these businesses.
Intel. Intel has announced that it is going to make smartphones (in fact, it has already made some). Intel has pots and pots of cash and is hunting around for things to spend it on. We think Intel would be nuts to go into the making-smartphones-and-tablets business, but Intel apparently doesn’t think so. So Intel might also buy RIM.