Research In Motion Limited (USA) (NASDAQ:RIMM) , earlier this evening, reported earnings below analysts forecasts. Additionally, Jim Balsillie, former co-CEO, resigned from the company’s board. RIM decided to stop issuing guidance on future earnings. The company looks like it is in deep trouble, reflected in the 10% drop shortly after earnings were announced.
RIM was once a great company with an all star product, Blackberry. However, their fall from greatness came once Apple Inc. (NASDAQ:AAPL) entered the market with the iconic Apple iPhone. Unfortunately, they have not been a serious player since and some are starting to wonder about the fate of this company. It has become quite obvious to us all that the management over at RIM is out of touch with consumers and mobile phone industry and some are beginning to speculate on a possible buyout for the company. Some bankers say that RIM is not a buyout candidate as a whole, per say but parts of the company could be purchased.
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RIM should absolutely sell off parts of their business to get down to a smaller, leaner company that could have lower costs and a better chance for survival. Who are some possible buyers? I see only the iconic technology companies being interested in purchasing parts of the business because they will be able to handle any costs that are inherited and they will be able to use the parts of RIM’s business more efficiently. I am talking about Google, Apple and Microsoft primarily.
I believe Microsoft Corporation (NASDAQ:MSFT) could stand to benefit the most out of those three tech companies because Apple and Google Inc (NASDAQ:GOOG) have the iPhone and Android already, and dominate their markets already. Microsoft on the other hand, has had a tough time with their Windows phones and they could really benefit from purchasing the Blackberry unit, hypothetically. If Microsoft bought Blackberry, I believe that would change the landscape of the market and Apple would be in some trouble. That is assuming that Microsoft wants to get into the mobile phone market as a more serious contender.
Research in Motion is dying a slow death and they will either be bought out or file for bankruptcy, if they continue on this course. The Blackberry 7 phone was yet another flub and the “much anticipated” Blackberry 10 will likely be another flub. I say this because the board of directors continues to launch products that consumers do not want. However, in RIM’s defense I will say that it would be extremely difficult to try to come back into a market where Google and Apple are the undisputed dominators. At the end of the day, it’s all about the survival of the fittest and unfortunately, it appears that RIM will not be surviving.