Saturday, December 24, 2011

Microsoft and Nokia Wooing, Amazon Jilted?


How are the mighty fallen!

The travails of Blackberry maker RIM don’t seem to be ending anytime soon. Their Playbook launch was a disaster, their email outages in October made a severe dent in consumer confidence, and their market share in the high end segment compared to Apple and Samsung is falling drastically. Is it any surprise that their shares are languishing at around $12, where they were once traded at $140. Another huge dampener has been the news that new phones which could perhaps give the other manufactures a run for their money and deemed critical for the company’s future will be delayed until Fall 2012. Has the Waterloo based company met its Waterloo?


There are unconfirmed reports that the company “was now essentially on the block.” Business Journals have reported that software giant Microsoft and the Finnish mobile phone giant, Nokia have expressed an interest in acquiring RIM. It has also been said Amazon, which came out recently with the wildly successful Kindle Fire, had been rebuffed. It needs to be said that all the companies mentioned above have never said they were interested in any such acquisition and all this might be pure speculation on the Press’ part. It, however, goes to show that RIM has sunk in esteem and is considered a target for acquisition.

RIM does remain a significant player in the corporate communications market and to be frank, the ease of its use in corporate communication is still unmatched. Unfortunately its devices have fallen out of favor with consumers who have gone in for touch ‘smart’ phones from Apple and Samsung. Compared to the overall US market share enjoyed by Android devices of 46.3%, RIM’s share was 17.2%. What was shocking was a 4.5% fall in less than 3 months.

Microsoft sitting on a cash pile of more than $40 billion can easily afford to buy RIM, whose value should be less than $8 billion. MSFT has also recently come out with its Windows 7 OS for mobile phones and Nokia was one company that was really interested in using this OS-the Lumia being the prime example for this collaboration. However, it needs to be seen how successful the new Windows 7 OS will be in combating Apple ios 5 or the newly launched Google Ice Cream Sandwich. My geekish nerd friend tells me that calling this an uphill task would be an understatement. Apple and the Android devices are so entrenched in the current market that upsetting their “apple” cart will be almost impossible in the near future.

RIM should have a bucket load of invaluable patents and these might be what the suitors are really after. Google—Motorola—ring any bells?? It also has quite a presence in the Asian countries, the stampede in Indonesia while not the best advertisement for its popularity still underscores the fact that its devices are sought after. I would be happy either way, if RIM can survive on its own and prove the naysayers wrong or if MSFT and Nokia acquire and turn it around. Competition does help in improving quality and bringing prices down, and Apple and Android devices do need competition!

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This is a guest post by Dr. Ramesh Grandhi. Some of his popular posts are
Lady Gaga, Why this Kolaveri Di? Justin Bieber
Bharat Ratna Sachin Tendulkar?
Are there really no full stops in India
Samsung Galaxy Note - Phablet or Tabone?
The Dreaded Pink Slip - Part I - How to avoid?

1 comment:

  1. Well worded. RIM is on the brink of disaster. Would be interesting to see how this year pans out for them and other players. Had some similar thoughts here .

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