The last couple of days have been exciting, rumour-wise, for RIM and its shareholders. First there was the rumour the Samsung was either interested in buying them, or licensing technology from them. Today, the whispers out there are that IBM may be interested in RIM, particularly in their network/infrastructure pieces. Samsung flatly denied they were interacting with RIM at all. The IBM deal might make sense, depending on how much of RIM they are really interested in. The Samsung deal made zero sense.
Samsung Doesn’t Need RIM
Samsung doesn’t need RIM. RIM offers nothing of significant value to Samsung, other than perhaps a patent portfolio for defensive purposes. Samsung is in no position to operate, manage and grow a network service. They already have 3 operating systems for smartphones (Android, Bada and Windows Phone), and 2 of those are already niche platforms. Adding a third niche operating system, Blackberry 10, makes no financial, technical or strategic sense.
Buying RIM to take them out of the market would also be a waste of money. Barring a miracle, RIM is done. It is far cheaper to let entropy continue to do what it is doing to RIM. Speeding things up has little economic upsides for Samsung.
IBM Might Make Sense
A deal with IBM might make sense, but only for a subset of RIM. There is no benefit to IBM in being in the mobile operating system or handset business. None. IBM has no clout on the desktop or with consumers anymore. They haven’t for a couple of decades now. Putting IBM’s brand on Blackberry 10 won’t make it mainstream. It will make it a marginal niche operating system with a different logo. When IBM sold off the PC division to Lenovo, they were basically completing a plan that started just before Lou Gerstner arrived, and one that was accelerated by Gerstner when he took over as CEO. That plan was to streamline and simplify the core business elements of IBM, and shut down or sell off those pieces that didn’t fit the core vision. It started with printers (before Gerstner took over), and ended with end-user PC’s and ThinkPads.
What would make sense is RIM’s network and enterprise integration. Some of the same arguments I’ve put forward in the past for HP and the mobile space also apply to IBM. IBM is an enterprise software, hardware and services company. All of their product lines and the services they offer are build around this premise. RIM’s network, along with their enterprise integration technologies, would fit within IBM’s focus.
RIM’s patent portfolio likely has some interesting components for IBM, but the handset-related technologies are not among those. IBM could buy up all of RIM, try to spin off or sell the handset business and related patents, and keep the enterprise technologies and IP for themselves. As for who would want the handset business: who knows? The patents would be the real value. BB10 and the hardware side really aren’t that interesting. They aren’t doing anything that isn’t already being done in Android or iOS (sure, the details are different, but the concepts are the same). RIM’s hardware design is, at best, competent. It isn’t a leader in industrial design by any measure.
But Is A Deal Real?
This isn’t the first time that speculation has appeared about RIM being a take-over target of some kind. With RIM’s condition, and the recent sales numbers showing continued dramatic decline for Blackberry, these types of rumours will likely become more prevalent, and not less. They won’t end unless RIM manages a miraculous turnaround, a deal actually occurs, or RIM is simply shut down. Whether this latest rumour has legs is yet to be proven, and it is pure speculation until then.