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IBM informally inquired about possible acquisition of enterprise services unit of RIM

RIM
By Michelle Haag on 9 Aug 2012 10:05 pm EDT
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It seems that lately not a week goes by without some sort of rumor popping up about Research In Motion being sold off in pieces. Today's rumor is regarding the enterprise services division of RIM and IBM, who has supposedly "made an informal approach about possibly acquiring the division". One of the persons familiar with the matter has stated that no talks are currently underway regarding any such sale, and spokespersons for both IBM and RIM refused to comment on the rumor.

Earlier this week we also heard rumors of Samsung looking at making a RIM purchase, which Samsung later denied. Take this as you will folks, though it's probably just another rumor to add to the long list. I'm sure we'll see many more between now and the launch of BlackBerry 10.

Source: Bloomberg

Michelle Haag Michelle Haag "@_Miche11e_ and C0001B3B5" 1199 (articles) 1687 (forum posts)

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IBM informally inquired about possible acquisition of enterprise services unit of RIM

65 Comments

RIM shares are up over 18% this week alone on these rumors.

It doesn't make sense for anything to happen at this time, RIM is waiting for BB10 to hit the market. The only way I can see RIM breaking up their divisions and selling them off is if they are desperate for cash. Cash that they need to launch BlackBerry 10. There is no doubt that RIM's focus is software, their purchase of QNX and development of BlackBerry 10 is the future of the company. Their services business brings in $1B/quarter but this could be lower in the short-term due to carrier putting pressure on the price of the service. This would lower the ARPU for RIM. And we all know their hardware division is losing money significantly as users hold off on purchasing a new BlackBerry and/or possibly try (switch) to another platform.

...to say the hardware end of the game is dead before it launches is wrong. Of course their hardware end is 'drying' up of the last year and change as it is becoming a legacy product...when RIM bought QNX, the writing was on the wall for all the current hardware configurations...the PlayBook demonstrated what the next generation hardware may be like. To say that RIM will be software only, I think is premature. Look at the other device entities...Apple, hardware/software...Google is painfully fragmented..maybe this is why they bought Motorola...No matter which way you look at it, having your own hardware keeps the whole platform under control, and makes it better...I do however think they need to scale back on how much hardware they produce...they need maybe four handsets...a touch/QWERTY high end, and the same in the budget department...

BlackBerry Torch 9860 BBOS 7.1
BlackBerry PlayBook O/S 2.xx.xxxx

Actually, the vultures dropped dead of boredom a long time ago...they're only interested in the dead and dying. Rumours and B S.won't feed nobody.

IBM currently doesn't have a mobile worker strategy. Getting Lenovo to make the PCs that IBM supplies to its clients is working out well for them. IBM godfathering RIM would fit the same mould.

yeah,probably, RIM need more money to recuperating themselves, joint venture and sell some RIM part to giant companies are the crucial ways to them.But, RIM should be careful,do not let other companies abuse the opportunity to defeat them.

Doesn't make sense for RIM to carve out it's enterprise business and sell it off. However, a partnership does make sense. IBM has a lot more enterprise customers than RIM does!

Indeed, a partnership with IBM could be fruitful for both. RIM needs their business customers happy and they need all the cloud based services IBM can offer. Perhaps working together on a solution made NewBay's acquisition redundant.

I would hope that IBM will not buy RIM but to work side-by-side on an entirely new integrated consumer & business mobile solution.

Well I can't say I have enough to buy the whole company but I'm seriously considering buying a few hundred shares. The question is when. Truth be told the next two quarterly reports will be tough. However this has to be balanced with the launch of the new product lines.

What has peak my interest is the decided shift in the reporting on RIM. There seems to be genuine interest in BB10 perhaps due to the lack of new innovation in the mobile phone space. We will see what happens.

BlackBerry Mobile Fusion is a Canadian gold mine waiting to be tapped. Shorts are in a panic.

I'm buying the company and I ain't partnering with no one. I is the champ! And don't start any rumours or I'll sue.

I can see how it might make sense for IBM Software Group to pick up the Enterprise business of RIM. They already own the gold standard of inter-applications communications in MQ or what ever they call it these days. Adding Fusion to that makes a lot of sense. I can also see IBM Global Services picking up the NOC's. It makes good sense as it doesn't compete with their telco partners and customers but delivers excellent enterprise value. I can't see them in the devices side of things however.... Too commodity like. IBM wants high margins for its acquisitions. If they pick it up, it'll soon support Apple and Android as good or better than RIM devices though which is not good for RIM. I can't see RIM going for it short of a fire sale.

With RIMM tradingng under $8, it would be easy for IBM to spend the $4B to buy the whole company... But the board would also be neglecting its fiduciary duties if it didn't seriously consider a valid offer for a major portion of RIM. They wouldn't have a lot of choice. IBM usually doesn't go for hostile takeovers so I'd guess they'd want the board to be receptive but don't forget John Wetmore (former IBM Canada President) is one of the board members.... They'd know who to talk to to get it done.

That being said, I can't see it happening before the release of BB10.. RIM has to make that gamble first. If it fails, IBM could pick it up cheap.

I also think Amazon would be another good potential buyer for the rest, if not, all of it. For consumers, Amazon would be the better buyer but BB10 would need to show SOME life for them to take the risk.... Although at these prices it isn't much of a gamble for companies with pockets as deep as IBM (they bought Lotus for $3B 15 or so years ago and it didn't hurt a bit. Cognos was $7B if I recall and RIM has bigger upside.

At these prices, I might buy it!

I think it's ridiculous that people would suggest that RIM should dump it's NOC operations. Especially when Apple, Google, and Microsoft are trying to build out their own.

Just because they call them cloud services, doesn't mean they aren't the same thing.

Founder of Pulsecode Engineering and taab

Desktop Bridge for the BlackBerry Playbook
twitter: #DesktopBridge

I agree ....

I say screw samsung, screw iOS and android aswell, blackberry and rim are what can't wait to be supporting With blackberry 10 ... I got a torch n will sell both it my ip4s and unused android for there new phone. Blackberry by choice! @SDTRMG

Torch 9810 on AT&T with 7.1.0.402
Playbook 64 with OS2.0
Sometimes RIM stockholderi

I think IBM would make a perfect partner or owner of RIM. The infrastructure compliments IBM's back office market. I think that IBM should also use their influence with Lenovo ( they are 30% or so owner) to partner on the handsets. The infrastructure is worth more with the secure handset to go with it.. Lenovo could provide lower cost production and the capacity as well. Lenovo engineers are pretty good to. Their laptops including the Thinkpad brand are the best selling. Corporate IT loves Thinkpad. Add Thinkphones and Thinkbooks by BlackBerry and you have a winner in the corporate space.

You're right! Not that I want RIM sold at all, but that would be the only company that could build on what RIM has done over the past 15 years.

I like your thoughts on this. RIM wouldn't have to give it up, they could partner. IBM toting that solution into corporate world wide as a consulting play, with an eye toward security, and integration, etc. would broaden the offering and give RIM major cred. It also helps IBM's corp consulting moat, which are the family jewels.

Further, they add finance and perhaps guidance with the hardware/software balancing act. I remember when they were mostly iron, and slowly they transformed, hell they were nearly dead once. So they have been there, and they are long way from dead!

Cool to see BlackBerry users proudly announcing and showing off their devices in these posts. I should join in :D

Torch 9860 running 7.1
Torch 9810 running 7.0
PlayBook 64GB WiFi running 2.1 beta
Two more BlackBerrys in my household plus two more PlayBooks :)

Don't want RIM giving their great hardware business to Lenovo. Sorry. RIM builds the best mobile hardware, as good as or better than anyone including Apple (according to Consumer Reports, 2011).

From a services perspective, a partnership with IBM would be idea for both companies. RIM has a lot to offer IBM, and in turn, IBM has a lot to offer RIM and their customers -- corporate and individual users too!

Yeah?
Well I have been eyeing the trackpad, trackball and tracwheels seeing thry will not be kept going forward.
I have been consistently been told to go to hell.

You do bring up a good point. When I first saw the BB7 devices, I wondered why RIM put a trackpad on these touchscreen devices. It seemed to make no sense. However, over time, I've actually started to favor using the trackpad a lot. It gives far more precision when moving and positioning the cursor, for selecting links on websites or buttons in apps. I must say that I will miss it on the BB10 devices. I already do on my PlayBook, but not as much since the PlayBook has a larger display.

This obviously does suggest that we need a better method of positioning of the cursor on touchscreen devices. Personally, I prefer the method used on BB6 devices like the 9800 (larger square thumb tab, for lack of a better description) than on BB7 devices or the PlayBook. I don't like the "flimsy" iPhone-like tabs used in the BB7 devices and the PlayBook as they're too darn hard to move about.

Splitting the company up, at this point, is one of the stupidest ideas I've ever heard of! >:(

Maybe if there's a partnership it might be okay for RIM, but a takeover? Oh puuuhhhhhhllleeeeeese!!! :p

There you are! I was wondering where your dumb, trolling a55 has been hiding. I see the institution gave you a day pass again.

Was about to say the exact same thing. Public companies have to tell the truth to their shareholders and when they deny something I say ok nothing to see. It's when they fail to comment I get interested in what's going on - because if there was nothing to see - they would say move on. They didn't

IBM NEVER comments on its acquisition strategy... So even if they weren't interested, they'd say the same thing. Invent a rumour that they are going to take over Samsung and see what they say. I wouldn't read much into the no comment comments.

I think it is only a matter of time before something big happens to RIM: either it is acquired outright or some bigger player acquires a large stake in the company and they form a strategic alliance.

The company can be bought for less than book value and still has lots of cash. I am sure that many have thought or are thinking about it. By many measures, it is a true bargain.

It is clear that RIM is trying to go it alone but once a company is seen as being in play, I think some others will come out of the wood work. The board would have to consider offers.

People who simply say that there is no chance of something like this happening without offering any explanation of why this is so should really be ignored.

- BES is still better than good and other MDM solutions for managing BLACKBERRY devices. If you disagree, you dont know how to use a BES.

- Mobile fusion is still not done, but has great potential and could be finished off and IBM could get all the praise

- The few times ive had to call RIM for BES support, its been phenomenal, once you get past the first tier.

There's three reasons for their enterprise services still having value.

...and a lot of companies (IBM being one of them) are starting to realize that BYOD isn't what they thought it would be (worse security, more people required to run it, etc. etc.), and it is costing them more money than before when it was all RIM...

BlackBerry Torch 9860 BBOS 7.1
BlackBerry PlayBook O/S 2.xx.xxxx

BYOD is becoming bring your own disaster. BlackBerry Mobile Fusion is in the drivers seat, in pole position. Just saying.

BYOD will lead to no security as Mikey L warned many times last year. As an enterprise IT manager, do I want corporate info on a personal device that can be lost or stolen? What are these guys thinking??

Some people just want toys to play with. They've been allowing execs to have iPhones because they also want to play Angry Birds at work on their own iPhones.

Smart companies will soon realize the error in their BYOD decisions. It seems like a great idea until you discover the true risks these companies are taking. It's far easier to take advantage of a company insider's phone or mobile device than to break into the building and get past security with proprietary documents in hand.

This is even less likely than Samsung or Google buying it up.

Still it's the portfolios most company value of RIM nowadays.