Is Divide and Rule RIM’s New Strategy?
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Recently, a London based newspaper, The Sunday Times reported an intriguing strategy that BlackBerry maker Research In Motion (NASDAQ: BBRY) may resort to. Last month the troubled smartphone manufacturer had hired JPMorgan Securities and RBC Capital Markets to test the feasibility of its various financial strategies. So, is this new strategy a product of this hiring? And, what is this new strategy?
The possible new strategy
According to The Sunday Times, RIM is thinking about splitting up its current business into two segments – the handset manufacturing segment and the messaging network segment. For some time now, the handset manufacturing business has been struggling and RIM can either sell it off to potential buyers such as Facebook (NASDAQ: FB) and Amazon, or it can turn the segment into a separate listed company. But, the question in my mind is, why will Facebook look at buying RIM. Well, Facebook CEO Mark Zuckerberg has plans to launch Facebook's own smartphones by next year and RIM's ready platform can surely help Mark turn his dream of making the world a more connected place into reality.
Now, coming to the messaging network business, RIM can make the segment available for use to big players such as Google (NASDAQ: GOOG) and Apple (NASDAQ: AAPL). Though both the playes have a well developed mail platform in their OSs, the reliability and the level of security which BlackBerry offers are qualities that will look attractive to the players. Apple, which is in the second position with a 24% worldwide market share, is battling to regain its leadership position and surpass Google's Android powered share of 29% held by Samsung. If the company can pull off a better deal with RIM and get exclusive rights to enter RIM's messaging platform, it will surely stand a good chance in beating Samsung.
However, the step on RIM's part will mean allowing its rivals to walk into its core competency zone. Can that be good? Well, only time will tell. The paper also mentioned something as an alternative solution. RIM can choose not to go with this restructuring and can instead put it up for sale or join hands with a 'biggie' to save itself from falling, which until now seemed to be inevitable.
RIM at work!
RIM is bucking up and trying to gain some momentum. Instead of being the jack of all trades, RIM wants to be the master of one. Management does not want to please everyone. Instead, the company plans to position itself on the basis of its core competencies and chase only the targeted consumer segments. The company has also decided to refocus its efforts on the enterprise business going forward.
RIM has plans of launching the much awaited BlackBerry 10 towards the end of the fiscal year. Till then the company plans to make the maximum out of its BlackBerry 7 smartphones and OS by pushing sales. The company wants to penetrate into the market by providing upgrades to BlackBerry OS 7 to the existing users and by attracting new first time users through its entry-level BlackBerry 7 devices.
RIM also has Microsoft’s dream
RIM seems to be sharing the same dream as Microsoft (NASDAQ: MSFT). Both the giants seek to provide a unified platform for both category of handheld devices – smartphones and tablets. But, Microsoft here wants to go that extra mile and link smartphones, tablets and laptops, desktops and ultra-books too with its latest siblings - Windows 8 and Windows Phone 8 platforms.
BlackBerry Mobile Fusion, the latest from RIM, is a next generation solution which will allow efficient management and coordination between BlackBerry’s current ranges of smartphones, BlackBerry PlayBook, soon to be launched BlackBerry 10 devices as well as other devices powered by Google’s Android and Apple’s iOS, like I already mentioned earlier, thus providing a holistic approach in using its platform. With this move, though RIM will be making its core expertise available to other players, RIM has better chances of coming back into the game. This plan might work out and help the top line improve as BlackBerry’s security features are unmatched and other prominent players will surely like to tap into that and thus further leverage their current dominance.
By now, everyone knows the company is in a bad shape and management is desperate to pull it up. There is nothing new to that. Now, with chances of restructuring itself, how RIM plans to survive is a question. The company will come out with its earnings release on the 28th of June. Let’s wait and see what the company has to say about its recent quarter. I am sure no one wants to see RIM go the R.I.P. way.
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