Exclusive: Microsoft tie-up, network sale among RIM options: sources

Thu Jun 28, 2012 10:42pm EDT
 
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Nadia Damouni

NEW YORK (Reuters) - Research In Motion Ltd's board is under mounting pressure to consider unpalatable options such as selling its network business or forming an alliance with Microsoft Corp after the Blackberry maker again delayed the release of its next-generation smartphones, said three sources familiar with the situation.

Shares in the Canadian company, which announced a steeper-than-expected quarterly operating loss on Thursday, plunged 18 percent in extended trading, slashing its market value to $4.1 billion. The stock has fallen about 70 percent in the past year.

RIM said the launch of BlackBerry 10 mobile devices has been postponed to early 2013 - more than a year later than initially promised - because the development of its new operating system had "proven to be more time-consuming than anticipated."

The latest setback has increased pressure on RIM's board to more seriously explore other options, including measures that would amount to an admission that it cannot survive by sticking to its current strategy, said the sources, who declined to be identified because the information was confidential.

One of these options is for RIM to abandon its own operating system and adopt Microsoft's upcoming Windows 8. Microsoft CEO Steve Ballmer had approached RIM in recent months, looking to strike a partnership similar to the one the software giant has with Nokia Oyj, the sources said. Under that partnership, Nokia will use Microsoft's latest Windows operating system on its smartphones.

In such a scenario, RIM could also look for Microsoft to buy a stake in the company and fund marketing and other expenses, the sources said. However, this option is not attractive to RIM because it would mean the end of the Waterloo, Ontario-based company's technology independence, they said.

The RIM board prefers to see through the efforts to develop the new BlackBerry 10 operating system, according to the sources.

Microsoft could also be interested in RIM's wireless patents, the sources said.   Continued...

 
A woman uses her mobile phone at the Blackberry World Event in Orlando in this May 1, 2012 file photo. REUTERS/David Manning/Files