TC2's David Rohde on Telecom
By David Rohde Posted June 1, 2012
Let’s go for the short answer: Yes, BlackBerry-maker Research in Motion will probably be sold … or something. No company issues the kind of continuous drumbeat of news about restructuring, job-cutting, replacing executives, and hiring “advisers” (a.k.a. investment bankers) that RIM keeps putting out there without something happening.
RIM’s 75% fall in stock price over the past year comes with a big temptation for the prospective purchasers who will presumably be talking to RIM advisers J.P. Morgan and the Royal Bank of Canada. RIM’s current market cap of $5.25 billion is barely half its liquidation value and comes with zero debt. Such steals on paper don’t come along every day.
Call the BlackBerry a #3 player in the mobile device market behind the Apple and Android worlds if you want. It’s still in the hottest marketplace around – mobile communications. And the types of players who may sign up for confidential looks at the books could range from competitors to private equity firms to non-North American interests. In a world where people can write headlines like Would You Buy a Smartphone from Mark Zuckerberg?, anything is possible!
The BlackBerry continues to have important tentacles into the institutional world, such as at the U.S. Defense Department. Your company also may be a place where the BlackBerry’s legacy remains strong.
But the key takeaway for most companies is that it’s very hard to restrict smartphone options to the BlackBerry any more. It may be just as well that BlackBerry could go into a new corporate parent that has plays in the tablet space, as well as anything else that comes along.
More troubling could be a scenario where the company is sold in parts. Rampant stories about certain buyers being interested in RIM’s patents, with other buyers being interested in the devices and network that generates fees from the carriers that sell BlackBerries, suggest a scenario where buyers are more interested in cash flows than in preserving customer experiences. Migrations down the road if BlackBerry fails to develop a credible response to the applications ecosystems of its rivals are a possibility.
Once again consumerization is rearing its head in the mobile marketplace. Whether your exact response is as focused as an increase in device options or as broad as a leap into “Bring Your Own Device” – about which we still have many cautions – wireless procurements now have to have an eye on how end-users think and are being influenced in the general culture.Tags: Mergers, Smartphones