Struggling BlackBerry-maker Research In Motion’s fate: Swallowed up by Microsoft?

Apple Online Store“Research In Motion blew away earning expectations for the fiscal quarter that ended last month, sending its shares up 2%,” Michael Corkery reports for The Wall Street Journal.

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“But analysts focused on the downside: The BlackBerry maker said it added only 4.5 million new subscribers in the quarter, missing its target of 4.9 million to 5.2 million; it announced that this was the last quarter for which it would disclose how many new subscribers it was adding; and it has steadily drained its cash reserve,” Corkery reports. “That cash reserve fell to $2 billion from $3.2 billion in the previous quarter, mostly because of share repurchases but also because of higher levels of inventory. In other words, it isn’t selling as many BlackBerry’s as it planned for).”

“RIM executives talked optimistically on a conference call to discuss the earnings about being able to catch up to Google’s Android at the low end of the smartphone race,” Corkery reports. “But the slowdown in new subscribers doesn’t bode well. Short sellers already were on the case, as short interest doubled to 31 million shares at the end of last month from 17.2 million shares at the end of May.”

Corkery reports, “With the pressure on, it could be time to dust off those M&A scenarios that have been floating around for months. Chief among those scenarios: Microsoft acquiring RIM.”

Read the full article here.

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[Thanks to MacDailyNews Reader “James W.” for the heads up.]

31 Comments

  1. Note the inventory issue. RIM over manufactures, and they wind up with devices sitting on shelves. Apple manufactures just in time, suffers some complaints about not enough inventory, but doesn’t waste money, and maintains a bit of the mystique that suggests their products are so desirable that they’re always sold out.

  2. why would MS want RIM? they already won the MS vs RIM war. When blackberry first came out with BES i bet it scared microsoft because people didn’t care wether the backend ran MS Exchange or some cheapo email server since it all sent the data to blackberries the same way.

    MS fought back with ActiveSync with Apple and Google licensing it and using it to kill RIM there is no more need for RIM and it’s archaic mobile OS.

    Blackberry is more secure than ActiveSync but no one cares since iphones and android phones have a lot more functionality.

  3. This analysis is from hedge fund assholes. RIM blew away absolutely everything except subscribers. They make good money and have services that no one else can match.

    I’m all for rivalry between platforms but MDN is quoting complete jackasses spinning harder than a turbine to protect their shorting of stock. It’s manipulation and it’s transparent bullshit. When analysts trash Apple with the same stupidity we are all their to call bullshit. Well, this spin from the anal cysts is just that: bullshit.

  4. theloniousMac, you misrepresent (or misunderstand) just in time manufacturing. It is a process of not keep deep stock of component parts used to manufacture a product. Virtually all manufacturing is done this way noe (including no doubt RIMM’s)

    Apple,exhibits good inventory management, ie little inventory stacked in the distribution channel. However this is not the reason for shortages (actually this kind of tight management make more product available where it is needed (rather than sitting in stock in a warehouse in an area where demand is not as high)
    Apple has had the manufacturing taps wide open and still can’t satisfy the huge demand that is simply a question of supply and demand (demand exceeds ability to manufactures=shortage) This is not due to inventory management or some contrived shortages as you post infers.

  5. Microsoft may think such a move makes sense. Microsoft is strong in “enterprise” with Windows. RIM is also still strong in the same segment, for smart phones. RIM also needs a new OS badly. Microsoft and RIM can work together to transition Blackberry into Microsoft’s primary smart phone for the “Windows Phone” platform, while maintaining and leveraging access to RIM’s existing server infrastructure for Blackberry.

    It does not need to be an acquisition; it can be an investment from Microsoft to infuse RIM with the necessary cash to fund the transition work. That would reduce risk to Microsoft and avoid the type of disaster that resulted from the Danger acquisition (Kin).

    Whether Microsoft and RIM could actually pull it off successfully… that’s a separate question.

  6. Smart phone market share per CNBC

    RIM 36.3% Apple 23.8% Google 17%

    Microsoft grabbing RIM would push it right to the top of the pile.

    Then what happens to the investment in Win 7 Mobile?

    More like Apple has a problem being stuck with only one carrier as RIM and Google doesn’t.

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