RIM Dissmisses Rumors of Company Split

By CIOinsight  |  Posted 06-26-2012 Print Email
RIM, responding to reports that it may split its hardware and services businesses, reiterated that it is focusing on partnerships, licensing opportunities and strategic business model alternatives to save the business.

BlackBerry-maker Research In Motion is considering separating its services business from its handset business, either of which it could then potentially sell, The Sunday Times of London reported June 24, though it didn't cite a source. However, RIM and its supporters are dismissing the report.

Amazon and Facebook are said to be potential buyers, with Apple and Google possibly eyeing RIM's successful messaging service, were it up for grabs. Here are 10 reasons why we think RIM's survival depends on ditching the BlackBerry.

However, Canada's Globe and Mail quoted unnamed people close to RIM, who called the Sunday Times of London report "a silly fantasy" and "one of the most ridiculous ideas I have heard in a while."

The Globe also quoted two former RIM executives who said top managers at RIM don't take the idea seriously and that splitting the two would accomplish nothing. Former RIM co-CEO Mike Lazaridis, it added, agrees the strategy wouldn't work.

For years, RIM executives have been holding out for the next big, nearly-there release that would surely save them. In a July 2011 research note, RBC Capital analyst Mike Abramsky defended the idea of such a split, saying that QNX--the software RIM was waiting for at the time, now renamed BlackBerry 10--was not a panacea.

Abramsky went on to write:

Despite the steps of QNX, PlayBook, BlackBerry 7, new devices, etc., the handset organization may still be moving too slowly and too conservatively; RIM has strengths in device, network and hardware engineering, but the market has shifted from hardware to software, from network needs to the consumer experience. RIM needs to up its game by promoting and/or recruiting new blood with competencies around software, consumer user experience, developer tools and relations, and marketing, and raising operational standards for accelerating product cycles and scaling operations. We believe the split may accelerate organizational change and help reinvigorate RIM s culture and promote new blood, given that the current organization has missed (and dismissed) key disruptive changes in the market

RIM has indeed since promoted new blood and mixed things up. In January, it announced little-known COO Thorsten Heins would take over for co-CEOs Lazaridis and Mike Balsillie. Heins, who at the BlackBerry World 2012 event in Orlando in February told reporters that there was a new excitement at RIM and employee morale was high, has undone other executive redundancies and trimmed down RIM staff considerably--reports of layoffs range from 2,000 to 6,000--in an effort to save money and make RIM the "lean and mean" company it needs to be.

To read the original eWeek article, click here: BlackBerry Maker RIM Dismisses Report of Company Split



 

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