Who Wants BlackBerry? Three Potential Buyers for RIM

Its stock is down, but the company’s cache of smartphone patents might interest a tech giant or two

Around 50% of consumers are interested in purchasing a tablet computer, a number that’s only going to continue growing in the next few years. Of those potential customers, 95% of them are interested in purchasing Apple‘s (NASDAQ:AAPL) iPad. Other tablets don’t fare as well. Only around 10% of prospective buyers are interested in Hewlett-Packard‘s (NASDAQ:HPQ) TouchPad. Just 8% are interested in Samsung’s Galaxy Tab or Motorola‘s (NYSE:MMI) Xoom. Then there’s Research in Motion‘s (NASDAQ:RIMM) PlayBook. Just 4% of potential tablet buyers want a BlackBerry-branded tablet.

It isn’t just the meager interest in RIM’s new tablet business that’s the problem, though. Interest in RIM is weak across the board. The stock was trading below $26 on Wednesday, down from about $48 during this time last year, and down from nearly $130 in August 2008. Its share of the ever-growing smartphone industry is expected to decline to about 13% by 2015. It laid off 11% of its workforce at the end of July. Times are rough, and they’re likely to get rougher by the time RIM releases its next earnings report, in September.

Is there hope for RIM in the arms of another? Google‘s (NASDAQ:GOOG) purchase $12.5 billion purchase of Motorola is a good sign for RIM. After all, RIM controls a large swath of technology patents, a commodity Microsoft (NASDAQ:MSFT) and Apple have turned into artillery in the mobile technology war. The Wall Street Journal‘s Rolfe Winkler doesn’t think that RIM is an acquisition target, though — at least not yet. The company will, at this rate of attrition, only get cheaper. So who might buy RIM and how would its business fit into those potential buyers’ ecosystems? Some potential suitors:

Dell

For all of Dell’s (NASDAQ:DELL) woes, the company isn’t having a terrible 2011. Its consumer PC business is struggling, but consumer PCs haven’t been Dell’s bread and butter for a long time. Business sales keep Dell earning money, and those business sales are up almost 7% in 2011, with revenue up more than 5%. The company has multiple devices in the pipeline to augment its business services, including tablets that run both Google’s Android and Microsoft’s Windows operating systems. At the right price, RIM’s technology and patents could be potent additions to Dell’s business division. They would give Dell exclusive control of a trusted (if faded) brand in the business world. What’s more, RIM’s technology still commands enough interest amongst users for Dell to avoid the perilous situation HP got itself into after purchasing Palm.

Microsoft

There is absolutely no guarantee that Microsoft and Nokia‘s (NYSE:NOK) gambit to make Windows phones a serious competitor against Google and Apple will work. Nokia’s prominence in the international market is declining and Microsoft has never found the secret recipe for capturing the mobile market in the way it did with PCs. In the event that its partnership with Nokia fails, it’s doubtful that Microsoft will simply give up the mobile ghost. A solution would be to start manufacturing its own devices. Purchasing RIM would give Microsoft an even broader portfolio of software and hardware patents as well as an established mobile device manufacturing business. But as it would for Dell, RIM would have to go to Microsoft at a relatively cheap price to be considered a bargain.

Hewlett-Packard

Rolfe Winkler thinks that HP’s purchase of Palm rules it out as a potential RIM buyer. Given HP’s poor overall performance in 2011 and the bath it’s taking on the TouchPad — its first major original release using the new Palm-developed webOS mobile operating system — that assessment isn’t out of bounds. As is true for Microsoft, though, HP could gain a greater foothold in the mobile market by controlling RIM’s wealth of patents, especially when coupled with patents gained through Palm’s business. HP would hold the lion’s share of patents from the early days of the smartphone industry, something that would make the company a very real threat to manufacturers like Apple.

As of this writing, Anthony John Agnello did not own a position in any of the stocks named here. Follow him on Twitter at @ajohnagnello and become a fan of InvestorPlace on Facebook.


Article printed from InvestorPlace Media, https://investorplace.com/2011/08/who-wants-blackberry-three-potential-buyers-for-rim/.

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