What's Going on with Research In Motion and Samsung?

By Chris Umiastowski on 17 Jan 2012 04:43 pm EST
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Research In Motion + Samsung

Today, as Kevin already mentioned, BGR published a story talking about a potential sale of RIM to Samsung. Let's talk about this in a bit more detail. I think it's a darn interesting topic.

Clearly the stock market likes the idea. Just look at the stock. The Samsung rumour was published by BGR at around 11am, and the stock immediately spiked higher, and continued to drift higher throughout the afternoon. RIM is now up over 10% and it's safe to say the reason is purely based on the Samsung rumour.

RIM has been active clarifying false rumours lately ... often using Twitter. This time I don't expect them to open their mouths at all even if they see the story as misleading or incorrect.

Why? Because it is most likely that RIM is engaged in some sort of discussions with Samsung, and because when it comes to merger and acquisition rumours, it is safer to say nothing at all. Let the market work it all out. That's how most public companies roll.

The headline that BGR used was, "Research in Motion pushing for sale to Samsung". I personally have a hard time believing that Jim Balsillie is out there pushing hard for an outright sale of the company to anyone. Jim is a deal maker, sure. He has always been RIM's front man for cutting carrier deals, creating partnerships, and forging content relationships.

Those activities all involve building RIM into a bigger and better company. For better or for worse, he believes in the company. I don't see him pushing for a sale. I don't even believe the board of directors (outside of Jim) is ready to consider that yet.

Still, a deal with Samsung could make a lot of sense. When I say a deal with Samsung, let's include the potential sale of RIM (however unlikely) but let's also include a potential licensing deal for BlackBerry 10 and use of RIM infrastructure.

For good measure, I also think it's possible that Jim could be chasing an equity investment from Samsung. RIM's cash balance is significantly lower than its competitors, and an equity stake in RIM might make sense to Samsung. If Samsung took a stake in RIM it would send a strong message to the market about RIM's future.

What would RIM bring to Samsung? A lot. Let's go through some of the ways in which a partnership like this makes sense.

First, Samsung would reduce its reliance on Android. This OEM has become the clear leader in the Android hardware market. Samsung is a great hardware company but does not control a platform. It's easy to see how they might be attracted to the idea of having some control over a full mobile platform. They could develop hardware once and release it for both Android and BlackBerry 10 if they wanted.

Together with RIM, it's possible that all Samsung and RIM future devices could utilize services such as BBM, whereas this capability would not exist on other Android devices or on iOS. The size of the BBM user base would then expand dramatically.

Remember Metcalfe's law? The value of a network is proportional to square of the number of devices connected to that network. The same thing goes for social networks and users connected to that social network. BBM is a massive social network. It would be much more massive with Samsung supporting it on all their hardware out of the box. In the Android space, this would further help Samsung differentiate from other Android manufacturers.

Samsung could also implement QNX within its large family of home appliances. I can't really envision the value of QNX on a washing machine quite yet, but it would be nice to be able to stream HD video from a Playbook or other BlackBerry 10 device to a Samsung TV with no fancy configuration. Think out of the box support using NFC and DLNA. It's just so much easier to make it all happen when you team up. Consider also the stronge presence of QNX in automotive infotainment, which is a growing opportunity that Samsung could dive deeper into.

Samsung can surely already do much of this by using Android. But they do not control Android. Without control over the operating system (and developer tools, cloud services, etc), you are essentially a commodity hardware maker. If Samsung wants to be more than a hardware vendor then it would make a lot of sense to partner up with RIM.

Microsoft has done it with Nokia, and Google has done now done it with Motorola. Why not RIM and Sammy?

I'm a shareholder of RIM and I'm happy to see the stock up 10% today. I don't believe RIM is at the point where they are seeking out buyers, but instead partners. Samsung seems very logical.

66 comments

shabbs

I for one welcome our new RIMsung overlords.

All hail RIMsung.

;)

gluth

BGR? Bullshit Generated Regulary? And you all belived them? Stupid.

dwill400h

interesting.....they need a change in order to compete with the apples and androids lol

r0v3rT3N

I personally don't like Samsung phones, so this is going well with me...

ianbordas

+1 ... Not a fan of Samsung Phones either but hey... if it happens.. so be it!!!

Concession

Same here. I own one and it is torture. Just counting down the days left in the contract.

I really hope if there is anything going on between RIM and Sammy it is not a merger/buyout.

buckwylder

or rim could keep it all for themselves, using this experience of a 10 percent share increase in a day based on one rumor as an example of how rim is valuable - as rim, with or without a buyer

either way

____________________________________________________________

in the time of your life, live so that in that good time, there should be no ugliness or death for yourself or for any life that your life touches, seek goodness everywhere

diego.roscetti

Very interesting read. Thank you. That makes a lot of sense in how this partnership would benefit both parties. Interesting to see how this plays out.

cbcastle

All my friends have a Samsung Android phone, it would be pretty cool to see a BBM Android client available and finally complete my social network.

Liquid_Revolver

RIM failed like I said they would...its RIP aka Fire Sale time....

HTC_droid_EVo here and I am loving it

Bow down to sammy its for your own good.

sk8er_tor

Yet you still come here.

thecsman

I bet he uses the liquid revolver ala 2g1c. :D

Kiddo2050

Where are you from? Podunk Kansas?? When companies are bought in Silicon Valley it's not viewed as a failure. RIM has valuable assets that will be paid for.

Bankruptcy is failure and sorry HTC_droid_EVO that ain't going to happen, now lick your wounds and go back to your cave.

In fact if it does happen I'd say it's a failure for droid, as manufacturers are looking for ways to abandon ship now that Goog has bought moto.

Your attempt to grasp at this shows that you know your prediction is never going to happen. With Samsung or without it RIM and BB10 are here to stay!

westex#WP

Kiddo2050, that kind of delusional thinking is what got RIM in the position it's in today.

buckwylder

they might "need a change" - and that is exactly what they're doing, is changing

they can continue changing and still be successful without a buyer, this just proves their worth, or value - whatevz
___________________________________________________________

in the time of your life, live so that in that good time, there should be no ugliness or death for yourself or for any life that your life touches, seek goodness everywhere

Snowman888

Please let this happen! It will be a great move to bring back consumers.

ima5exypaki

very interesting article. I would have to agree too - teaming up with Samsung doesnt sound so bad! The Samsung TVs are getting more and more tech'ed up, and with RIM in the mix the potential of great things is possible!

diegonei

Great read. What about the more obvious buyout by Ford rumor? I hope we can see a piece on that too, Chris!

Zupof

Would the Canadian government allow the buyout of a Canadian company by a foreign one?

thecsman

My guess is they are talking with Samsung on how to cooperate to bring DLNA to the PlayBook. Cooperation is good. I do not want to see RIM's data servers in other companies' hands.

123berryaddicted

I heard rumour that RIM was going to surprise expectations and release BB10 hardware in April, perhaps it will be Samsung releasing a galaxy series phone (they already have the hardware) with RIM's BB10 software? THAT would be awesome (IMO)

heywood57

BBX on other hardware would give RIM short time to market with a modern (hopefully LTE ready) phone.

anthogag

On N4BBs website it also talks about Ford (autos) being interested in buying RIM.

I personally think RIM should stay its own company and make OS licensing partnerships if they see the need etc...

maxb1ack

Samsung seems very logical.

Alex_Hong

the idea of partnering up sounds fine by me. as long as it is not an outright sale to Samsung.

Tony_11

There's no doubt that Samsung continues to dish out new hardware one after the other, and their hardware capabilities + RIM's software/ security, it has potential. That said, last thing I want is a messy situation, or a name change from RIMpire to something else. If it does happen, and plays out smoothly, this could be a big step-up for both RIM and Samsung alike.

HabsSuck

I doubt RIM is seeking a buyer it's more likely a partnership and Sumsung would be a good fit.

Personal I'd like to see how BB10 plays out and PB OS 2.0, contrary to some of the comments made by Mike Abramsky, I think OS 2.0 looks real nice.

ghostzapper

I heard a rumor that the board, Jim and Mike were actually going to communicate a clear and concise vision of RIM's future and execute vs. the day by day rumors, "coming soon", small tokens to establish investor goodwill by lowering their salary to $1/year, non-existent marketing campaigns, vague commentary in conference calls, have a lot in the pipeline but never seem to deliver, and on and on it goes. How many quarters do they plan on subjecting their shareholders to the later?

rdsx2002

So, in other words, you heard a rumor that would end any and all "empty" rumors? Rumors about rumors about future rumors, wait cancel that rumor about the rumor...it was just a rumor

monotok

I hate Sumsung phones, they look cheap and tacky plasticy horrid devices :/ would not buy a Sumsung Blackberry device ever!!!

Hope it is some deal with patents or some patent licensing :)

The only company that is building hardware and software is Apple and it would be nice if they had a competitor like RIM with BB10 :p

Sirhill

Great read for sure. Two questions.
1. If this would be a partnership why would RIM allow Sammy to have complete control over the OS? Does not seem like a good deal for RIM.

2. Could you make it completely clear for me and others, that if this happened would Sammy be able to use bbm on android or WP devices that they build.

Khashayar24

You guys forget that RIM is a canadian company.
Why should they sell the company to a korean company when a company like Amazon is interested???

I absolutely agree with mOnOtOk that RIM and Samsung doesnt fit at all.

People with prestige and a good taste use BlackBerry and for me Samsung doesnt suit in that constellation

I promise that RIM will wait until the release of BB10. If they dont manage to put things on the right track they will sell the company to Amazon or Microsoft.

Just keep the thumbs up that we dont get sold. WE ARE STILL RIM!!!!!

thymaster

I vote fight for BB10 out before making any dooms day prediction for RIM.

Shlooky

RIM should get out of the hardware business, give it to Samsung and focus on enterprise applications and enhancing their BIS/BES network.
That's the only way I see it. If Samsung does in fact buy RIM, then kiss RIM good buy because Samsung will take the OS, BBM and dump the rest.

El Platanero

Now a partnership would be great. Picture a bb keyboard with a sammy screen (total turn on).

Kiddo2050

It would not be helpful to Samsung to take over all of RIM. A big part of RIM is corporate and no disrespect to South Korea, but I don't think corporations will want to place their trust in a company based there as opposed to Canada.

Also Samsung is a consumer-oriented company, partnership is best for both sides.

kojita

I don't have a clue, but I see RIM pushing BBM to Samsung devices '(sort of scaled down version of BBM) and possibly integrating NFC with samsung tech, definitely more partnership than a sale. Man, I would hate a sale.

kingbernie06511

BBM is not working on QNX, so BBM on Android is even more of a fantasy...

1lomeri

BBM on QNX isn't the problem, it's trying to get around having 2 devices with the same BBM pin when they're not connected. It would stupid to have its own, so people would have to send a message to both things, doesnt make sense.

E.L.

edwinsberry

RIM is in a stronger position than the media, critics, and competitors give it credit for. That said, only the the insiders and deal makers at the top can probably see all the moving parts to tell if some sort of deal makes sense. For me, I don't see the synergies with Samsung so clear cut. I also think it isn't so common for public companies to rumor on something that is actually happening. Usually it is when things are quiet and not being bantered about is when something is actually happening. I don't buy this rumor, I don't buy the fit, and if everything RIM has put in place is executed better, things could look very different a year from now. Licensing? Different story. License the heck out of it.

BB10Apps.com

Wow interesting. I doubt Rim would be sold though, the canadian government would block that. Canada is pretty good at protecting big canadian firms. Also correct me if Im wrong but isn't the CPP hugely invested in RIM, so wouldnt it make sense that they want to recover the money from the stock going low by having RIM bounce back on their own?? and not from the just selling it to a foreign company and cutting the losses??? So more likely they will just partner up.

check out www.BB10apps.com for the latest apps reviews for the awesome and spectacular Blackberry Playbook

Darlaten

Foreign ownership for Canadian companies in the telecommunications sector is currently listed at no more 46.7%; the remaining percentage must be Canadian.

Source:

http://www.tc.gc.ca/eng/policy/report-research-tp14500e-summary-1632.htm

Look at Report: TP 14500E

thecsman

Hey, nice site, there's a lot more apps you can review now, including free ones.

halifaxx11

Didn't one of RIM's execs leave to go to Samsung awhile back?

JerseyKurt

The Hell with Android... it has sooo many security flaws & it is on the Shittiest of phones to the Best of phones. Blackberry is Blackberry. ..Take it for what it is. Maybe 1 step behind. But still the best. I'd rather have my trust Blackberry then a iPhone & and Android like the rest of the Prag douches in this country.

ghostzapper

One thing about rumors is that it keeps some people busy for the day.

Samsung says not interested in buying RIM

http://www.reuters.com/article/2012/01/17/us-rim-idUSTRE80G1Q520120117

If it's not Amazon it's Samsung. Who's on deck?

BBPandy

Samsung isn't interested in RIM

SEOUL — Samsung Electronics Co said on Wednesday it was not interested in taking over Research In Motion after shares of the BlackBerry smartphone maker jumped more than 10 per cent following a tech blog report that it was seeking to sell itself to the South Korean firm.

“We haven’t considered acquiring the firm and are not interested in (buying RIM),” Samsung spokesman James Chung said.

Chung also said Samsung had not been approached by the Canadian firm for a takeover.

The Boy Genius Report website cited an unidentified source as saying that RIM co-chief executive Jim Balsillie was meeting with companies interested in either licensing its software or buying a part or all or RIM, with Samsung leading the pack.

Read more: http://www.vancouversun.com/business/Samsung+interested/6010436/story.ht...

glamrlama

Obviously this follows on the GS announcement from earlier. This better be a partnership deal or equity deal of some kind. Samsung needs control or at least access to an OS. The GOOG acquisition of Motorola I think has spooked the hardware manufacturers. If GOOG decides to stop supporting and maintaining Android for some reason the hardware manufacturers would be in a lurch. Sammy has the cash to cut a deal to access RIM technology and Sammy has a very broad hardware footprint it would be able to deploy RIM communication/integration solutions on.

BB10Apps.com

that quickly ends that!!! would have been cool if they surprised people with samsung phones running BB10 at the mobile world congress next month :P. I've had feature phones by samsung and I tossed those around like crazy and they were good.. not sure how the quality is now though.

check out www.BB10apps.com for the latest apps reviews for the awesome and spectacular Blackberry Playbook

Chango_BB

I also don't like a sale. If it is for the screens, RIM can buy them like otter companies such as Apple does. I think BBs problem with the OS are been address with QNX, they need to get BES to work with it and with OS2 coming out that's the only thing they are missing. Phones with BB10 will be like little playbooks and that would be awesome. I think a bigger problem is appsand content. Google and Apple want to make it a two horse race,which is better for them. Google has been droping support for BB devices because they want to be vertically integrated like Apple. A better fit for RIM I believe is Amazon or Microsoft. They can leverage on the platform and provide the content and services thatRIM cannot provide on their own.. Samsung brings hardware but still no content. If the BB10 is like the PB RIM will be kicking a**** but without conntent or apps we will end up with the same situation.

rexrim

with this imba partnership rim+sammy it will make iphone become isuffer :p
goodluck rim n sammy =)

1lomeri

Sale, no way, samsung just stated that they weren't considering it.

Partnership - definately good on both parts, in a world of tech partnerships, both need a buddy. That would be a good partnership for RIM
E.L.

manjazz123

BGR is a crap website with crap sources. Please don't ever use them as a source for rumors ever again.

dagerlach

Chris,

Interesting thoughts. However, I think this sentence from your article best captures what is happening at RIM, "I don't believe RIM is at the point where they are seeking out buyers, but instead partners."

Indeed, RIM needs good partners!

David

Joe257

I would very much hesitate to sell RIM to anyone. Do we really want RIM to outsell Android? Yes & no. I think we all want RIM to be better, not necessarily bigger. A Samsung merger (i.e., sellout) would not make RIM better. It will rip RIM apart. Samsung has a different agenda than RIM. Samsung wants to be bigger. Samsung is also trying to manage rapid growth. They've even outmuscled Sony in the entertainment market.

The trouble is, Samsung sells devices not platforms. Samsung will have a difficult time pushing a platform. They're trying to do just that with SmartTV and it's losing ground to Boxee and other competition. Samsung is a big player in the Android community, so they'll not back out of that. They'll just consume RIM and use its assets to position themselves in a stronger leadership position with Android.

Shlooky raises something that has been discussed many times: should RIM be in the hardware business? I say YES because their hardware is so freakin' good!! Why is it that even today, no one can make a keyboard as good as BlackBerry? Why do they have the most reliable hardware, according to Consumer Reports?