RIM And Amazon: The Deal That Wasn’t!

by Gaurav Kheterpal on December 21, 2011

At the beginning of this year, several high profile analysts predicted that Waterloo’s Research in Motion will be acquired in what would be one of the biggest mobile mergers in history. Some went as far as to predict the demise of the Blackberry maker, prophesying that RIM will not live long into 2013 as an independent entity.

And to be honest, RIM did no favors to itself – unacceptable quarters, listless sales and trouble transitioning to BBX has all helped the company’s reputation weaken over the last while. And therefore it’s understandable that questions continue to be asked over when RIM will be bought out.

A recent Reuters report indicates that Amazon sited its interest in acquiring Research in Motion this summer but the struggling Canadian smartphone maker seemed more interested in “fixing its problems on its own.” It is also believed that Microsoft and Nokia “flirted with the idea of making a joint bid” in recent months but they did not make a formal offer.

Can RIM “fix its own problems”? Is acquisition the best way out for RIM? I’m not so sure. Though it didn’t eventually happen, RIM and Amazon joining hands would have been a mouthwatering prospect for sure.

It is believed that Amazon hired an investment bank to draft a merger offer this summer, but it didn’t actually table it. However, reports suggest that the two companies are still discussing opportunities to “expand their commercial ties, which currently include a service launched last year to make Amazon’s music catalog available to some BlackBerry users.”

With RIM in the bag, Amazon would have an in-house mobile device manufacturer under its belt, much like the Google – Motorola Mobility alliance. With Kindle Fire making a decent debut, Amazon could have leveraged RIM’s PlayBook experience (read ‘debacle’) to rekindle its broader tablet strategy. Given RIM’s dwindling fortunes, RIM could have been a decent bargain buy for the online retail giant. Anyway, it didn’t happen so there’s no point discussing the “ifs” and “buts”.

On the other hand, Microsoft’s interest in RIM is understandable. The two companies already have a partnership to build a “cloud service” initiative that allows corporate customers to move back-office infrastructure to off-site data centers.

In fact, the takeover reports have proved to be a blessing in disguise for the Waterloo giant as the company’s stock advanced 11 percent in late trading. FWIW, RIM stock had recently tumbled to its lowest level in almost eight years after the company announced that it won’t start selling smartphones with its new BlackBerry 10 software platform until the “later part” of 2012.

Time and again, RIM has indicated that it’s considering licensing deals and other commercial partnerships, but it’s strongly opposed to the idea of selling the business. The under pressure co-CEOs, Mike Lazaridis and Jim Balsillie have been busy chalking plans on reviving the company through better phones, restructuring, and the better use of its core assets such as BlackBerry Messenger. It’s a good plan but there’s a slight problem – Time is fast running out!

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Written by: Gaurav Kheterpal. www.digitcom.ca. Follow TheTelecomBlog.comby:RSS,TwitterFacebook, or YouTube.

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