As much as phone manufacturers have great opportunities to grow these days, a few couldn’t just keep up with the competition. Two of which are Nokia and Research in Motion. Just about a couple of weeks ago, Nokia announced through a press release that it will be laying off yet another 10,000 employees and 3 executives. A few days back, RIM revealed that it’s planning to let go of its handset business and focus on one field it has mastered over the years.
Both are looking forward that bigger players in the industry like Microsoft, Facebook and Amazon are interested in buying out some shares or even a company as a whole. It’s always interesting to speculate which of these two companies could be bought out first so let’s talk about them in length below and speculate later which one still has the juice to offer profit for new owners.
Nokia-Microsoft Relationship and Buyout Rumors
Had it not because Nokia adopted Microsoft’s Windows Phone operating system for its new generation smartphones, it could have continued going down until nothing is left for the Finnish company to continue. The birth of Nokia Lumia series was a reborn for Nokia and it was because of those devices that its brand continues to live ’til now. Since then, Nokia maintained good relationship with Microsoft and just recently, in a one-day event held by the company, a Windows Phone 8 prototype was shown to the public and Joe Belfiore confirmed reports that it was built by Nokia.
Analysts believe that by the end of this year, Microsoft may announce that it is buying the Finland-based company considering it now has a smaller market cap of under $10 billion. To reiterate, the future of mobile computing is brighter than any other businesses nowadays. If Microsoft bought Skype for $8.5 billion and online ad firm Aquantive for $6 billion, it could pay up to $9 billion for Nokia to get access to thousands of its patents and factories. But how can we possibly say that Microsoft is interested in acquiring the company?
– In a developer-focused conference held by Microsoft just recently, Nokia was the only phone manufacturer to give out presentations; Nokia’s Senior Vice President Kevin Shields spoke.
– Nokia’s near-field communication technology will be the one used in Windows Phone 8.
– Nokia Maps will replace Bing Maps in Microsoft’s latest mobile operating system.
– The Finnish company announced that its navigation app which is currently available in its Lumia series of phones will be ported to Windows Phone 8.
– In October last year, Nokia’s trading per share dropped from $7 to $2.50 losing almost two-thirds of its value.
The company’s flagship for this year, Nokia Lumia 900, could have been its savior only if it could be upgraded to Windows Phone 8.
RIM Splitting in Two and Buyout Rumors
Reports surfaced that Research In Motion (RIM) is planning to split the company in two separating the messaging network from its handset division and pursue in selling it to interested parties. British newspaper The Sunday Times reported without citing its sources that both Facebook and Amazon are potential buyers.
RIM has always been struggling to regain lost market share thus pushing it to make a considerably huge turn to salvage what’s left of it. In an interview with CNET, RIM’s CEO Thorsten Heins said, “We believe the best way to drive value for our stakeholders is to execute on our plan to turn the company around.” And just like Nokia, it has also started laying off employees with a plan of reducing its manpower to just 10,000 by yearend.
Between Facebook and Amazon, the former may be more interested in buying the hardware division of RIM considering it visualizes having to compete in the smartphone market; the evidence is apparently the rumored Facebook phone. Amazon, on the other hand, has already established its brand with its Kindle Fire and so far, there were no rumors or reports indicating that it will jump into the smartphone bandwagon and compete with already established manufacturers like Samsung, Apple and HTC.
RIM’s upcoming release of its newest mobile operating system, BlackBerry 10, somehow helps the company stabilize its market value. In truth, it may be able to salvage the entire company and that’s even the reason why it hired JP Morgan and RBC Capital to develop a business plan.
Nokia vs. RIM: Who Has An Edge Over The Other?
Both companies are going nowhere but down. However, Nokia seems to be falling faster than RIM. While rumors that Microsoft would be buying the Finnish company is louder today, there would still be a greater possibility that the software giant will not pursue with the acquisition. The Register reported that Microsoft was allegedly given access to the company’s books but wasn’t impressed.
Moreover, it is facing a lot of problems with its flagship. PC Mag reported that the AT&T variant of Lumia 900 was plagued with connectivity problem forcing it to offer $100 credits to all owners. Just recently, it has to face lawsuit for alleged fraud. In a bid to keep its presence in the phone market, it has to expand its Asha line of phones.
Meanwhile, RIM is bracing to release its new line of phones, this time without the physical full QWERTY keyboard. Besides, RIM has a good foundation in the corporate market and many companies still prefer BlackBerry Messengers to be used by their employees. So, as far as health is concerned, RIM still has an edge over Nokia and it could be the first company that could be bought out first. We will be able to know the final plan of the company when it reveals its plan by the end of summer.