Analysis: Could RIM's survival mean abandoning the BlackBerry?

Fri Dec 16, 2011 8:36pm EST
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By Alastair Sharp and Pav Jordan

TORONTO (Reuters) - It might seem like corporate heresy but an increasing number of technology investors and experts are asking whether Research in Motion needs to ditch its BlackBerry handset business to survive.

The idea that is gaining favor, albeit only among a minority of shareholders, would see the Canadian company fully open its secure and highly respected network to rival smartphone providers and concentrate on that business while getting out of the hardware game altogether through a sale.

Disappointing quarterly results, including a dismal outlook for Blackberry sales and word that RIM would delay the introduction of new devices, sent its shares down more than 11 percent to their lowest levels in almost eight years on Friday.

Just before those numbers were released, activist shareholder Jaguar Financial called on the company to sell its handset business and monetize its patent portfolio while retaining the high-margin services business. "Jaguar believes that the road map to value restoration lies in a sale of RIM whether as a whole or in separate parts," it said.

RIM's spidery, data-crunching network reaches behind corporate firewalls and taps into mobile networks globally.

The network, unique among handset makers, has been a cornerstone of the BlackBerry's growth - with email and instant messages routed through RIM's own enterprise servers and data centers, where it is encrypted and pushed out to subscribers.

There are no middlemen to intercept corporate or state secrets, or even the flirty chats of teenagers who love the free BlackBerry messaging.

TERMINAL DECLINE?   Continued...