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RIM Sells Cloud Service NewBay for $55.5 Million at a Loss

newbay-rim

RIM isn’t exactly raking in a lot of cash at the moment. After it lost the recent patent litigation suit against Nokia and had to license the said patents for roughly $65 million, we figured the company had hit rock bottom. However, the problems might be deeper than that, as the company has now sold cloud storage service NewBay which it acquired back in 2011. The worst part however is that the company has sold it for a loss, which speaks volumes of the company’s desperation to get some cash, and quick. This certainly isn’t going to boost the company’s morale, especially with the BlackBerry 10 launch nearing. The deal was made with Synchronoss Technologies for $55.5 million, while RIM had paid $100 million to acquire NewBay last year. It isn’t clear yet if RIM sold off NewBay to get quick cash or simply because it didn’t feel the need to use its services. But all hints point towards the former, and we think Nokia’s patent licensing deal has a lot to do with this. Perhaps RIM could have waited on the deal as it could have made use of NewBay in the future for its services like how iCloud and Google Drive work today.

We certainly have no knowledge of what goes around in RIM, but things don’t look all that bright. Analysts have claimed that the BlackBerry 10 devices will be DOA, so we’re not quite sure how RIM plans to come up from that. The CEO of Synchronoss, Stephen G Waldis spoke highly of the acquisition. He said it would help them “deliver the most comprehensive, scalable and secure cloud platform“. It is rather odd that RIM decided to sell its subsidiary at a loss while it could have easily garnered more if not double the amount. The folks at Synchronoss couldn’t have asked for a better deal and this is certainly going to be talked about as we build up to the BB10 launch.

January 30, 2013 is a crucial day for RIM for a number of reasons. Not only will its offering (s) be closely watched by critics and fans, it will also have to impress the existing bunch of iOS and Android users to make them switch to the new platform. Although the possibility of that happening is little to none, RIM will think it did its job well if it manages to win appreciation from developers. As we all know, Android apps will be ported onto BlackBerry 10 and RIM has already opened submissions with interesting cash prizes for the taking. So there is some interest among the developers for BB10 and we should see that increase as the days go by. Because let’s face it, without necessary apps, a platform is as good as a dud to most users out there.

Source: Marketwatch
Via: Phone Arena

One Comment

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  1. Do you do any research before you post this garbage? RIM has nearly 3 billion in cash with no debt. They increased their cash by around 600 million last quarter. New Bay has been a bad acquisition from the start, which you would know if you followed this at all, and they have been looking to offload it since August – way before the Nokia litigation, which by the way is not unique to RIM (Nokia has won against Apple etc.). Instead of developing their own cloud solution they are clearly going to partner with a more established player such as dropbox than create their own solution. Their mistake was acquiring the company in the first place.

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