In its review process, RIM is targeting about $1 billion in savings by the end of its current fiscal year and the eventual loss of about one-third of its staff, or 5,000 jobs. RIM declined to comment on the NewBay sale report.
RIM seeks other avenues for BB10
MeeGo/Tizen supposedly has a bright future in automotive, and BlackBerry 10 in machine-to-machine (M2M), according to their backers.
RIM's chief executive Thorsten Heins, who has been talking up licensing deals as a way to boost the upcoming platform's impact, now has his eyes on M2M. He told Bloomberg that the delayed BB10 is now in the final stages of testing and RIM is giving serious thought to potential licensees.
In the conventional handset and tablet space, these may be hard to find, despite the strong web credentials of the BlackBerry upgrade. Samsung recently denied interest - and already has a surfeit of OSes -, and most OEMs that want a second string to Android are likely to want something open source and more controllable.
This predicament has apparently set Heins' team thinking of other markets. Natural options could include automotive – the original target for QNX, the company which RIM acquired in 2010 and whose software partly underpins BB10 – and the broader M2M world, where high growth is expected in mobile devices. Of course, many of these, such as smart meters, will not require a fully fledged OS like BB10, nor will they deliver strong margins for software, but in-car systems are an exception.
“QNX is already licensed across the automotive sector. We could do that with BB10 if we chose to,” Heins said in the interview. “The platform can be licensed.” He added that RIM had received interest from the healthcare and smart grid sectors too, though he would not name any companies. QNX has also been used in power stations. "Smartphones are a part of our business, but we're looking way beyond this," he commented.
Mobile carriers, devices and chips are certainly moving beyond handsets to a host of different modules and gadgets, but whether Heins' comments reflect reality or desperation will depend how far these embedded objects develop a need for full web applications. Companies like Qualcomm and Verizon have developed software stores for M2M platforms but the scale of the requirement is unproven. If it does develop, the next step could be for RIM to open up its BlackBerry network to other industries, something Heins also hinted at.
RIM is also looking to sell off several of its minor units in a race for cash, including cloud services unit NewBay, which it only acquired ten months ago. This is part of the firm's ongoing strategic review, according to Reuters, a review which could end up with far greater changes, even the sale or break-up of the BlackBerry maker.
RIM bought Republic of Ireland-based NewBay in October for a reported $100 million (€80.5 million), during a phase when it was trying to address its challenges by diversifying into growth areas like cloud media. The acquisition seemed logical, bringing a range of video and social networking tools which could tie into carrier partnerships, cloud strategies or BlackBerry Messenger. The smaller firm offers a white label service, LifeCache, for storing content in the cloud, which is badged by Verizon, AT&T, Telefonica O2, Orange and other operators.
It was supposed to help RIM increase services revenue, enhance the BlackBerry offering and keep pace with Amazon Cloud Drive or Apple iCloud. It made a series of media related purchases in 2011, including video editing company JayCut, mobile social gaming specialist Score-loop and tinyHippos, developer of the Ripple mobile environment emulator.
However, the emphasis since new chief Heins took over earlier this year has shifted to streamlining and cutbacks, not a broader product range. That could see a series of divisions offloaded, some of them larger than NewBay. IBM was recently reported to be interested in the back end enterprise platforms. But many observers, including some activist shareholders, think RIM should hold onto those assets and instead focus on selling off the handset business. Heins, however, is clinging to the idea that the upcoming, though delayed, BlackBerry 10 will rescue the device platform, and enable this to remain the centerpiece of the firm’s activities.