RIM could sell its handset business: Report

Struggling smartphone vendor, Research In Motion (RIM), could be looking at splitting its business into two – the BlackBerry handset division and the messaging network division, according to a report by The Sunday Times. RIM had earlier roped in JP Morgan and RBC to advise the management on partnerships, licensing and business model alternatives. This seems to be one of the alternatives that the board might be considering.
RIM could either list the two companies as separate entities like Motorola did with its networks and mobility businesses. Motorola Mobility was eventually acquired by Google. The report mentions Facebook and Amazon as the likely buyers for RIM’s handset business while it could either sell or license its messaging service to other players like Apple or Google. The Times also indicates that it could keep the two businesses together but sell a stake to a larger company like Microsoft.
Rumors about RIM looking to either sell or license its messaging service are not new. Earlier, there were reports that RIM was pushing for a sale to Samsung, which was later denied.
When Thorstein Heins took over as the CEO, he had said he won’t split the company. “I will not separate or split RIM up into different units. In case any company wants to license BlackBerry 10, I will listen to them,” he had mentioned while answering a question during a call with investors and analysts.
However, things have only worsened for the BlackBerry maker as it races against time to release smartphones running on BlackBerry 10, which is expected in the last quarter of the year. RIM will be announcing its quarterly earnings later this week where it has revealed it is likely to post an operating loss.
“The on-going competitive environment is impacting our business in the form of lower volumes and highly competitive pricing dynamics in the marketplace, and we expect our Q1 results to reflect this, and likely result in an operating loss for the quarter,” Heins said in a statement late last month. Analysts also expect RIM to take a $1 billion writedown as its inventory of BlackBerry 7 smartphones continue to pile up. Apart from senior executives jumping ship, RIM is also undertaking a massive layoff and its long-time contract manufacturing partner Celestica also severed ties with the company.
Things are looking very bleak for the Canadian smartphone vendor and it is running out of time.