RIM shares are taking a major dip as the Waterloo company continues to struggle for survival. The company’s quarterly opening last Thursday, saw a lower than expected operating loss. RIM stock value has dropped a ominous, 70 percent in the last one year and the company is currently worth only $4.1 billion of which, about $2 is in cash reserves.
As if the monetary losses were not enough, Research In Motion has not been able to launch the next generation of BlackBerry OS as scheduled. The company now says that developing the next gen BlackBerry 10 OS has “proven to be more time-consuming than anticipated” and thus the launch of the OS will be postponed to 2013, more than a year ahead of the initial launch date.
According to a reuters report, RIM has considered alternative options for survival. Namely, embracing Windows 8 as the operating system for it’s handsets and selling it’s, in-demand, network business to a private equity firm or tech company and raise funds out of that sale.
“One of these options is for RIM to abandon its own operating system and adopt Microsoft’s upcoming Windows 8. Microsoft CEO Steve Ballmer had approached RIM in recent months, looking to strike a partnership similar to the one the software giant has with Nokia Oyj, the sources said. Under that partnership, Nokia will use Microsoft’s latest Windows operating system on its smartphones.”
The dilemma that RIM faces with such a partnership is that it will lose it’s operational independence and will no longer have complete control over the operating system, which RIM is used to with the BlackBerry.
“Another option for RIM would be to sell its proprietary network to a private equity firm or a technology company. The buyer could then open up RIM’s network operating centers to other smartphone providers, allowing them to also provide highly secured emails and other services to companies and government agencies, the sources said.”
The sale of RIM’s network business and it’s network technology such as BBM, would leave it with the loss making hardware business which will have to be then taken care of somehow. RIM could also consider licensing out it’s network services to other phone makers and thus, still in a way, survive in the market. In which case, the company could look for a buyer for it’s hardware business. Samsung possibly.
With the current trend, RIM’s days are only numbered. To survive, the company will finally have to look for alternate and ‘unlike-RIM’ strategies or end up filing for bankruptcy.