RIM To Split Up

According to reports in The Sunday Times in Britain, Research in motion is pondering over a plan to split up the company in two. The move will see their handset division separate from the messaging network before selling off their struggling BlackBerry hardware business to the highest bidder.

Although the British newspaper did not cite their sources, they were quick to credit the likes of Facebook and Amazon as potential suitors. Another option that the Canada based company is looking at is staying intact but selling a large chunk of their stock to a larger tech company such as Microsoft or Google.

When contacted on the basis of these reports, RIM declined to comment on specifics. However, their spokesperson confirmed that the company was closely examining different strategies at the present time.

“RIM has hired advisers to help the company examine ways to leverage the BlackBerry platform through partnerships, licensing opportunities, and strategic business model alternatives,” a RIM spokesperson told CNET News. “As CEO Thorsten Heins said on the company’s fourth quarter earnings call, ‘We believe the best way to drive value for our stakeholders is to execute on our plan to turn the company around.’ This remains true.”

The company has been having a torrid time to bring back their customers for their BlackBerry devices. However it is easier said than done with the once popular BlackBerry brand thanks to fierce competition from Google’s Android and Apple’s iOS.

Research In Motion’s fourth quarter reports show a total loss of 125 million dollars for the company and a 25 percent drop in revenue. Last month, the company had already announced that they would be posting an operating loss for the first quarter as well.

Research In Motion had recently hired J.P.Morgan and RBC Capital to examine their business and financial performance and advise it on the same. The company also confirmed that they were looking at several other strategic business model alternatives which more or less translates into the exploration of a potential sale.

The company, which had announced a broad restructuring plan with an aim to save a billion dollars by the end of the fiscal year, has already embarked on the path of firing employees as part of a hefty cost-cutting plan. Key executives have also left the company in numbers in the past few months. RIM’s chief legal advisor resigned last month after 12 years with the company, just a week after their London-based head of global sales quit.

Author: Saptarshi


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