1. carnicelli_713's Avatar
    RIM, like Motorola, needs a giant partner - The Globe and Mail

    Googles (GOOG-Q539.00-18.23-3.27%) bid for Motorola Mobility Holdings (MMI-N38.02-0.10-0.26%) proves a lot of things the value of patents, the advantages of making both hardware and software, the powers of activist investors.

    It also proves something else, something more fundamental and important: Just how hard it is for a $10-billion (U.S.) company like Motorola Mobility to compete in an industry dominated by giants worth 20 or 30 times more.

    Research In Motion (RIM-T26.48-0.11-0.41%) has a similar problem. Despite its problems, its a fine company and likely on the cusp of an exciting new launch of products. But it wont make it on its own. And just as Motorolas assets were worth more to a big player than they were to investors at large, so are RIMs. In fact, theyre worth more than ever, in my view.

    In the post-mortem analyses of the Motorola deal, you can read a lot about patent law, Internet-to-TV technology and all sorts of other esoteric things that are hard to wrap your mind around.

    For example, Motorola had 17,000 patents and another 7,500 pending. Google paid, according to Sanford Bernstein, the research firm, about $350,000 per patent. You can also read a lot about near-field communications, encrypted security and other geek-speak. Once done, you can apply what youve learned, or tried to learn, to a valuation of RIM.

    But theres an easier way. In May, I wrote about the likelihood of Microsoft (MSFT-Q25.35-0.16-0.63%) buying RIM. The thesis then was pretty straightforward. Just as computing evolved from the desktop to the laptop, its now evolving from the laptop to the smart phone and the tablet. Microsoft has essentially no presence in either market. (Its in bed with Nokia but that doesnt seem like a winning proposition.)

    As the transition from laptops advances, the effects will become apparent in Microsofts financials. It needs to become a player in smart phones and tablets.

    Since that column, a number of things have happened. Microsoft bought Skype for an absurd amount of money, proving that it doesnt always do the rational thing. It also, with Apple, RIM and a handful of other players, bought Nortels patent portfolio (for about $750,000 per patent), proving that value is in the eye of the beholder. Google bought Motorola, proving that patents are worth a lot.

    And, most importantly, Apples (AAPL-Q380.48-2.93-0.76%) iPhone sales went meteoric. In the latest quarter, they rose 142 per cent, higher than in any other quarter since the third quarter of 2009. Keep in mind that this growth rate was on a much, much higher base. Growth rates usually slow.

    Why is this important? Because it likely presages what will happen to tablet sales, and if so, its an indication of how quickly tablets will start eating into laptop sales. This, in turn, will put tremendous pressure on Microsoft to do something.

    And what will it do? It will, according to this theory, buy RIM, which gives it immediate access to smart phone and tablet sales (granted the latter are modest but with heftier sales and marketing, especially in the enterprise world, where Microsoft is strong, it could become a winner).

    RIMs next-generation phones are due out in a few months. In the meantime, investors will be wary of the stock because sales could, and probably will, disappoint. But at an enterprise value of about $11-billion (market cap less cash), RIM is trading for less than the price Google paid for Motorola, and RIM, with more than 60 million users, is clearly worth more.




    I, for one, agree with this article. No matter how much we want to believe the opposite, a move like this would be extremely beneficial for RIM. Thoughts?
    08-16-11 05:23 PM
  2. kevinnugent's Avatar
    True. And give Jim and Mike a billion each and send them home.
    08-16-11 05:30 PM
  3. Ithasbegun's Avatar
    True. And give Jim and Mike a billion each and send them home.
    A billion each? Yea, OK.

    Yes, Verizon 4G is really that fast!
    08-16-11 05:32 PM
  4. Nickerz's Avatar
    Very true, why wouldn't Google have bought RIM instead of Moto or both? If RIM's QNX is going to be a "game changer" as many think, then it seems to be a no brainer. Hence the good point about MS should think about buying RIM.

    Maybe Apple is gonna buy RIM and already has had an influence in the new 9900, since the new Bold has the similar aluminum ring and quality feel as iPhone4? lol!

    Either way, I feel RIM on it's own will not survive and will get bought out.
    08-16-11 05:33 PM
  5. papped's Avatar
    Maybe Apple is gonna buy RIM and already has had an influence in the new 9900, since the new Bold has the similar aluminum ring and quality feel as iPhone4? lol!
    Uhhh..... Not quite

    flyersfan76 and southlander like this.
    08-16-11 05:35 PM
  6. flyersfan76's Avatar
    Uhhh..... Not quite

    Exactly what I thought when I read it.
    08-18-11 03:42 PM
  7. dcgore's Avatar
    I think RIM should buy webOS from HP and merge it with QNX.
    08-18-11 03:56 PM
  8. otacon#AC's Avatar
    I can see Microsoft going after RIM. There's already close integration of Outlook, Exchange and such. Office on a BlackBerry would be great. I think it's simply a matter of when RIM gets bought out at this point. Whoever does buy them I hope they leave it alone for the most part.
    08-18-11 03:59 PM
  9. owningmonkey's Avatar
    Why is this in the 9900 forums?

    Posted from my CrackBerry at wapforums.crackberry.com
    08-18-11 03:59 PM
  10. southlander's Avatar
    Exactly what I thought when I read it.
    Yep.. a beautiful classic device. I saw one about a month back. I was in line in front of a guy talking on what I knew was a BlackBerry. I thought, wow does he have a Bold 9900? Then he turned and I could see the thickness of it and knew it was a 9000. Anyway, I was thinking.. still cool nonetheless.
    08-18-11 04:00 PM
LINK TO POST COPIED TO CLIPBOARD