Research In Motion (NASDAQ:RIMM) is thinking of splitting its business in half, and spinning its struggling handset unit off from its network and messaging business, according to a report in The Sunday Times. The report said that RIM might also consider selling a stake in the company.
The report, which did not cite its sources, said that Amazon or Facebook might be potential suitors, and RIM might open its global networking business to rivals such as Apple (NASDAQ:AAPL) and Google (NASDAQ:GOOG). Alternatively, the report said RIM might consider keeping the company together but selling a stake in it to another technology firm. Microsoft (NASDAQ:MSFT) was named as a possibility.
RIM confirmed in late May that it had hired JPMorgan Chase & Co. and RBC Capital Markets to advise it on strategic options. RIM CEO Thorsten Heins said that the banks are helping RIM "evaluate the relative merits and feasibility of various financial strategies, including opportunities to leverage the BlackBerry platform through partnerships, licensing opportunities and strategic business model alternatives."
RIM declined to comment on the report but reiterated the best way to return value to shareholders is to continue to execute on Heins' turnaround plan, which includes shedding $1 billion costs, restructuring the company's operations and, most importantly, launch the Blackberry 10 platform later this year.
RIM is banking on the release of its BlackBerry 10 platform to help it bounce back from falling sales and market share declines. However, many analysts are skeptical about RIM's ability to mount a comeback after losing so much market share as it has over the past several years, particularly in North America.
Microsoft has been rumored to be a RIM suitor in the past, but is also focused on boosting its own Windows Phone platform, which has struggled to gain traction in the market despite solid reviews.
RIm will report its fiscal first-quarter results Thursday after the market closes and expects to post an operating loss for the quarter.
For more:
- see this Sunday Times article (sub. req.)
- see this Blomberg article
- see this Reuters article
- see this Globe and Mail article
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